Investor Day - Veolia Finance

Transcription

Investor Day
December 2015
Disclaimer
Veolia Environnement is a corporation listed on the Euronext Paris. This investor day presentation and any related documents (“Documents”) contain
“forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and French securities regulations to
which Veolia Environnement is subject.
The purpose of these Documents is to describe the strategy that Veolia intends to pursue in the coming years, and some of the financial objectives
and targets that result from this strategy. As a result, the information in these Documents includes “forward-looking statements,” and readers are
cautioned to keep this in mind as they review these Documents.
Readers should also be aware that certain figures in these Documents are non-audited estimates for 2015 results (*) or objectives for future years.
Moreover, these Documents contain "non‐GAAP financial measures" which might be defined differently from similar financial measures made public
by other groups. They should not replace GAAP financial measures prepared pursuant to IFRS standards.
The estimates and objectives in these Documents are based on current assumptions regarding the 2015 results and future market conditions, as well
as targets set by management. While Veolia believes that these assumptions and objectives are reasonable, we cannot guarantee their accuracy
and the future performance of the group which may not achieve the results indicated. In particular, we might not realize the objectives in these
Documents for reasons such as the following:



We might not be able to realize the market developments that we are hoping to make and if we do, the results may be lower than we
currently expect.
We might not be able to achieve the cost and/or operational efficiency targets described in this document. This would be the case, for
example, if the synergies from our organizational structure turn out to be lower than we expect, or if we are not able to implement some or all
of the planned actions.
Market and economic conditions may vary, in some cases significantly, compared to the assumed conditions that we used for purposes of
determining our objectives and targets.
In addition to these risks, we urge investors to take note of the other risks described in the documents we have previously filed with the Autorité des
Marchés Financiers (French securities regulator “AMF”), particularly those discussed in the Risk Factors section of our Registration document filed
with the AMF on March 21, 2015 and updated on September 22, 2015 (www.veolia.com).
Veolia’s outlook and strategy may change at any time in response to the risks mentioned above or other risks that are currently unknown to us.
Other than as required by the law, we are not obligated to and do not undertake to provide updates to or revisions of any forward-looking statements
made in these Documents or in any Veolia Environnement public filing, whether as a result of new information, future events, or otherwise.
(*) the 2015 definitive results will be submitted for approval to the Veolia board of directors on February 24, 2016 and publicly released on February
25, 2016 .
2
Agenda
1.
New Veolia: a reality in 2015 (A. Frérot, 30 mins)
2.
Cost efficiency measures (F. Bertreau, 20 mins)
Brief Q&A session (10 mins)
3.
Veolia's strategy to capture future growth (L. Auguste, 30 mins)
Q&A session (15 mins)
Coffee break (15 mins)
4.
Business review illustration (Managers, introduced by A. Frérot, 60 mins)
5.
Capex allocation (P. Capron,15 mins)
6.
Veolia’s financial equation and restored financial flexibility (P. Capron, 35 mins)
7.
Conclusion: wrap up (A. Frérot, 5 mins)
Q&A session (40 mins)
3
New Veolia:
a reality in 2015
Antoine Frérot, Chairman and
Chief Executive Officer
4
The New Veolia announced in 2011 is a reality in 2015
Geographic streamlining and new organization

Disposal program & deleveraging achieved

€750m cost cutting target exceeded

5
Geographic streamlining and new organization
We have streamlined our geographic footprint
Global
businesses
18%
2011
77 countries
We are already reaping
the benefits of our new organization
 A customer focused organization, with a central
Commercial and Marketing department:
France
40%
Rest of the
World
18%
‒ Key account managers and representatives
by country
− Cross fertilization and ability to offer diversified solutions
Europe excl.
France
24%
2011 revenue: ~€22bn
45 countries
Today
Global
businesses
20%
Rest of the
World
23%
France
22%
Europe excl.
France
35%
2015 est. revenue: ~€25bn
 One Veolia per country
‒ Increased control of operations
‒ No “division” level: improved flow of information and
decreased structure costs throughout the group
 A central Technical & Performance department
‒ Definition of relevant KPI by BU, shared throughout the
Group
 One Veolia HQ: a leaner organization with reduced central
costs
6
Integrated organization for sustainable growth
THE VEOLIA EXECUTIVE COMMITTEE, A COHESIVE TEAM DEDICATED TO DEPLOYING A COHERENT STRATEGY:
 An integrated group for
greater agility and
performance
‒ a single Veolia per country,
with a management
structure based on 11
geographic zones
‒ cross-functional strategic
departments to bring us
closer to our customers
and optimize our
performance: Innovation
and Markets, Technical and
Performance
Antoine Frérot
Chairman and
François Bertreau
Chief Operating Officer
Philippe Capron
Chief Financial Officer
Estelle Brachlianoff
Senior Executive
Vice President UK & Ireland
Philippe Guitard
Senior Executive
Vice President Central & Eastern
Europe
Laurent Auguste
Senior Executive
Vice President Innovation and Markets
Claude Laruelle
Director of Global Businesses
Regis Calmels
Senior Executive
Vice President Asia
Patrick Labat
Senior Executive
Vice President Northern Europe
Jean‐Marie Lambert
Senior Executive
Vice President Human Resources
Helman le Pas de Sécheval
General Counsel
7
Successful refocusing
MAIN DISPOSALS



Ambitious disposal program enabled us
to streamline our business and gain
flexibility
Dissolution of the Dalkia JV allowed us
to refocus on the attractive international
energy business
Selective acquisition of minority stakes
(Proactiva, Voda) increased our
operational control
1
2
Planned Transdev exit
Year

Berlin
2,064
’12-’13

UK regulated water
1,517
2012

VESNA Solid Waste
1,464
2012

Ridgeline
203
2012

Veolia Israel
232
2015

Marius Pedersen
240
2014

Impact of Dalkia operation
348 1
’13-14
TOTAL DISPOSALS
Amount (€m)
5,100
1,253

Amount (€m)
2012
2013
766
2
2014
363
As of 30-Sep2015
Net impact of Dalkia operation: €348m in debt reduction
Including net impact of Dalkia operation
8
Sharp deleveraging & restored financial fundamentals
Cost of net financial debt3 (€m)
Net financial debt (€bn)
4.7x
748
14.7
~3.0x
~3.0x
1
~440
~8.7
2011
2015 est.
2011
2015 est.
Leverage ratio2
 We have significantly brought down our debt and financial burden
1
2
3
c. 2.7x excluding VTD
ND/ EBITDA
Adjusted cost of net financial debt: financial expense excluding the cost of bond buybacks and discontinued operations
9
2011-2015 Cost cutting: €750m target exceeded
 ~€800m cost cutting expected at yearend 2015
Net cumulative savings vs. 2011 in €m
─ Strong commitment from all BUs in the
savings plan:
2015 objective
upsized to
€750m1
800
• Improved project definition and
monitoring
• Internal audit control
Target:
750
582
2015 objective
upsized from
€420m to €470m1
 Split of the savings by nature of costs:
350
─ ~50% from SG&A
─ ~20% from purchasing savings
─ ~30% from operations
1
142
2012
2013
2014
2015
(expected)
Objectives revised in August 2012 and May 2013
10
Our reinforced positioning as an undisputed global leader
Global
Businesses1
UK & Ireland1
Northern Europe1
Central Europe1
€5,080m
€2,520m
€2,200m
€2,910m
France1
Waste: €2,510m
Water: €2,910m
North America1
Italy & Iberia1
€1,830m
€1,040m
Asia1
€1,250m
2015 est. revenue (€bn)
Municipal
56%
Other industry and
tertiary
Industrial
44%
Latin America1
4.7
2.6
Other transversal
0.8
1.3
1.5
Mines Metals Power
Agro - Pharma
Oil & Gas
1
2
€650m
14.2
2015 est. revenue
As of December 2014
Africa/ Middle
East1
€1,160m
Municipal
Australia &
New Zealand1
€980m
~€25bn
179,500
estimated 2015 revenue
employees2 in 11 zones
11
All Veolia employees are committed to the successful execution
of the Group’s strategic plan
 Management and employee incentives are aligned with the company’s
strategy, and therefore with shareholder interests
− Management Incentive Plan implemented at the end of 2014 subscribed
by ~230 top managers
• Three-year plan with ability to multiply benefit of personal investment
based on two criteria: execution of annual EPS targets and share
price improvement.
• All Executive Committee members subscribed
• New plan being considered that would be applicable to more
managers
− Employee bonus plans now standardized throughout the world
− Employee share purchase program launched in October 2015
• Offered to employees in 20 countries around the world, with more
than 29,000 employees purchasing shares
12
The group’s strategy: to deliver sustainable profitable growth in
the years ahead

Municipal: targeted development both in developed and emerging
countries, by addressing cities’ new challenges and adapting our
business models

Industrial: focus on 6 priority growth areas, taking advantage of
favorable trends linked to pressure on license to operate and growing
efficiency requirements

Continued improvement in operational efficiency, with 3 major axes
of improvement: Operations, Purchasing and SG&A, and an objective
of more than €600m over 2016-2018
13
2016-2018: A new ambitious cost cutting plan of more than €600m
 Same method as previous plan
 Project identification by country
 More than 400 projects to date
 An increasing commitment from all the countries in the program rollout
 Improved project definition and follow up
 Dedicated central team
 Internal Audit control
 An objective of more than €600m over 3 years
€m
2016
2017
2018
Gross savings
200
200
200
Implementation costs
60
30
10
14
Our positioning: A range of offers adapted to the new
requirements of Cities and Industries
Cities
Industries
Value creation levers
(boosters, specific offers)
(boosters)
Examples
 Prague – sanitation: anticipation of rainy periods, real
time supervision of the network, emergency plans
 New York – production of decentralized energy,
independence of the network, continuity of critical
services
 Guayaquil (Ecuador) – access to drinking water,
social tariffs, mediation
 France –Veolia partnership – Elise,
recycling, 250 jobs created
 “Social business” incubators
 Shanghai-Pudong – infrastructure monitoring
center, planning tools, dynamic asset management
 SALTO – Automated sorting, performance of the
process
 Rostock – Bottle to Bottle – recycling of
bottles, reduction of the carbon footprint
 WATER2ENERGY, Germany, Eastern Europe:
energy autonomy of water services, renewable energy
(biogas)
 Milwaukee – treatment of waste water,
recycling of sludge: ecosystems and biodiversity
protection
 Lille – waste services: performance contract,
consistent waste collection and urban cleaning,
responsiveness
+
Resilient
+
Core offers
Traditional Models
Inclusive
Smart
 Shell - Pearl Gas to Liquid Complex, Qatar (Oil & Gas
downstream): zero liquid discharge
 Tangshan Iron & Steel, China (Mining & Metals):
treatment of industrial water, reuse of 60% of water,
regulatory compliance
 Robotic cleaning of industrial tanks – optimization of
costs, improved quality and efficiency, reduction of safety
risks
 DEMB, P-B (Food processing industry): production of
energy from used coffee grounds
Construction
Operation/
Services
New Models
Circular
Examples
Value sharing
 FCX Oil & Gas San Luis Obispo, USA (Oil & Gas
upstream) - produced water management: increase in the
availability of equipment, increase in production yields
(Enhanced Oil Recovery, Opus technology)
 Tianjin Bohua Yongli (Oil & Gas downstream –
Chemicals), China – 28-year JV-DBOO for complete
management of the water cycle. Design, construction,
planning and co-financing of investments
 Findus, Sweden; Danone, France (Food processing
industry) – optimized management of resources (Water,
Waste, Energy); sharing of the value created
Livable
15
Municipal strategy: Meet local challenges by anticipating them;
contractual modes and financing adapted to country risks
Main areas of development
1. Cities in developed countries: strengthen our
distinctive features and develop innovative models
Financing of capital-intensive projects
Equity-financed projects
(“crème de la crème”)
 Efficiency/performance contracts (including smart offer) to respond to
cities’ needs of attractiveness and efficiency
 Circular economy projects taking advantage of regulatory
developments
 Public Service Delegation (Japan) and O&M contracts (United
States)
 OECD + CEE
 Other geographies
 Expected profitability:
 Expected profitability:
• IRR ≥ WACC +4%
• ROCE ≥ WACC at end
of year 3
2. Cities in emerging countries: targeted development
of our historical activities, within a suitable contractual
framework
 Concessions in average or large cities in China (heating networks),
Latin America, Central Europe
Projects finances by
partners
(AssetCo/OpCo)
(“crème”)
• Project’s IRR ≥ WACC
+3%
• ROCE ≥ WACC at end
of year 3
• Payback < 7 years
 Group’s investments
 Group’s investments
• ~€100m/ year
• ~€100m/ year
 Performance or operating contracts in Water, Energy or Waste
without investment in Africa or Latin America; BOT under AssetCo/
OpCo model in Water/Waste, smart offer in the Middle East
 Major Water infrastructure projects (VWT)
16
Breakdown of Municipal activity
Revenue
CAGR
€14.2bn
~2.0%
€15.0bn
CAGR
4.1
(27%)
+0.2%
France
4.0
(28%)
Rest of Europe
5.0
(35%)
5.3
(36%)
+2%
Rest of the World
3.4
(24%)
3.8
(25%)
+4%
Global Businesses
1.8
(13%)
1.8
(12%)
(0.3)%
2015
est.
2018
est.
→ Expected growth of around 2% p.a until 2018
17
Industrial strategy: confirmation of the 6 strategic pillars’
Industrial strategy: Focus on 6 growth pillars
relevance and their potential
Industrial revenue (€bn)
Financing of capital intensive projects
CAGR
+5%
11.0
Oil & Gas, Chemicals
1.5
(14%)
Mining & Metals, Power
1.3
(12%)
Food & Beverage, Pharma
Transversal growth themes
(Difficult Pollutions, Circular
Economy, Dismantling) on
other vertical segments
Other Industries and
Commercial
12.5
CAGR
→ ~€100m of
investment per year
dedicated to new
projects
2.0
(16%)
+10%
1.5
(12%)
+5%
1.0 (8%)
+8%
→ Dedicated to best
expected profitability
and best industrial
signatures
+6%
→ Same profitability/
objective as
Municipal
0.8 (7%)
2.6
(24%)
Equity-financed
projects
3.1
(25%)
→ Examples
4.7
(43%)
2015 est.
4.9
(39%)
2018 est.
+2%
• Development of
hazardous waste
sector (Germany,
Italy after Spain)
• Development of
integrated offers
for refineries in the
US
Projects financed by
the clients or
partners
→ ~€100m of investment
per year
→ Particular attention to
the quality of industrial
signature
→ Same profitability/
objective as Municipal
→ Examples
• BOT Water (cooling,
process, wastewater)
in the sector of Metal
& Mining in China
• Energy supply utilities
for a refinery in
Finland (DBFO
contract)
18
Total revenue growth 2015-2018
Priority growth themes
Revenue (€bn)
Industrial activities
Municipal activities
CAGR
Oil & Gas
Chemicals
2-3%
> €27bn
CAGR
Mining & Metals
Power
Traditional
activities
Food & Bev
Pharma
+
New municipal
business
models
5.5
1,6+0%
(20%)
(13%)
~ €25bn
France
1,3
5.4
(12%) (22%)
Rest of Europe 2,65,9
7.5
(27%)
5,1
5.4
(20%)
8.7
(24%)
(23%)
(35%)
9.1
3,1+3%
(33%)
(24%)
Circular
economy
Difficult
pollutions
Managing the end
of industrial cycles,
Dismantling
7.4
(27%)
+6%
5.1
(20%)
5.4
(20%)
+2%
2015 est.
2018 est.
Rest of the World(20%) 5.9
(23%)
Global Businesses
19
Two main objectives for 2018: Current net income above €800m
and €1bn net free cash flow


1
Our transformation efforts and our renewed strategy allows Veolia to implement a new
financial equation and enables us to set new 3-year financial targets
Revenue growth supported by development investments gradually increasing to reach
>€27bn revenues in 2018
2015 estimates
2018 targets
Revenue
~ €25bn
> €27bn
EBITDA
~ €3bn
~ €3.5bn
Current net income group share
> €550m
> €800m
Free Cash Flow1
> €500m
~ €1bn
Before dividends, assuming capex of c. €1.6-€1.7bn p.a. and constant net debt
20
Net free cash flow primarily dedicated to growth

We want to share the benefits of our cash
generation with our shareholders

Supplemental
discretionary
capex
We want to maintain our flexibility to fuel
supplemental profitable growth
opportunities by reinvesting the proceeds
of self-generated cash
Dividend
Free cash
flow
generation
21
Restored dividend growth starting in FY2015
 Dividend increase in 2015 to €0.731 per share in cash signaling the Board’s
confidence in the future
 From 2016 to 2018, we expect to be able to provide around 10% annual dividend
growth to our shareholders, while reducing our payout ratio
~ +10% p.a.
1
1
Payable in 2016, to be proposed for approval at the company’s annual shareholder meeting
22
Cost efficiency
measures
François Bertreau, Chief
Operating Officer
23
€m
2016
2017
2018
Gross savings
200
200
200
60
30
10
24
9 levers / 3 axes
3 major axes of improvement
2012-2015 Plan
2016-2018 Plan
SG&A
50%
20%
Operations
30%
45%
Purchasing
20%
35%
Purchasing ≈ €220m
9 levers
1. Reducing purchasing and outsourcing costs
2. Improvement of contract / entity, renegotiation, termination
3. Other revenue improvements under contractual scope
4. Technical and consumption optimization
Operational
performance
≈ €280m
SG&A
≈ €130m
5. Organizational efficiency
6. Reducing information systems costs
7. Reducing external costs at constant exchange rates
8. Reducing risks and associated costs
9. Reducing real estate costs
25
2016-2018 cost cutting targets by segment
Split by segment 2016-2018
Rest of the World
23%
France & HQ
35%
Rest of Europe
31%
Global Businesses
11%
26
2016 – 2018: SG&A
(~20% of savings)
 Internal & external benchmarks
 Despite efforts taken, Veolia’s SG&A costs remain high
- significant efforts in 2013 – 2014 (2 voluntary departure plans at the
head office)
- but we remain above average in many functions

Central HQ and central function cost cutting to accelerate
27
SG&A: Example of actions
 Reduction of HQ real estate costs (Aubervilliers) (€8m)
 One Veolia in Czech Republic and Slovakia: simplification and unification of
the organization of companies (€1.5m)
 Reduction of “Stadtwerke” structure costs in Germany (€1m)
 Reduction of real estate costs in the UK (€0.6m)
 Reduction of SG&A in China & Hong Kong (€7m)
 Reduction in ERP costs at VWT (€3m)
28
2016 – 2018: Purchasing: ~1% reduction per year
(~35% of savings)
2015 Total addressable cost base: ~€8bn
Costs by nature
Costs by owner
e.g. works
subcontracting,
energy…
2%
e.g. pumps,
pipes, interim
4%
7%
Subcontracting
8%
Central
€2,100
Operating equipment
42%
Fuel costs
Consulting services
9%
Mobile equipment
General purchasing
10%
Countries
€5,900
Other energy and chemical costs
18%
IT and Telecom
29
Purchasing: Example of actions underway (1/2)
 Rationalization of maintenance expenditures (US)
- annual expenditures: $10.1m / 300 suppliers
- performance indicators implemented across BUs and sites
- significant reduction of number of suppliers
- $1.2m in cost savings, 11.8% of expenditure
 Centralized purchasing of pumps at the group level
- annual expenditure of €108m across more than 10 categories of pumps.
- concentration of expenditures with top strategic vendors from 56% in 2014 to
71% in 2015
- €3.6m (5% of cost) in cost savings expected end of Dec 2015, €6.7m next year
30
Purchasing: Example of actions underway (2/2)
 Energy efficiency savings in French Water 2016-2018 (€9.5m gains)
- diagnostics and simulation with « Ocean »
- optimized management with « CISPEO »
 Implementation of new programs of light vehicle / utility vehicles
purchased in France
- impact of new manufacturers’ pricing scale
31
2016 – 2018: Operating performance: 3 + 1 steps
(~45% of savings)
 Benchmarking (“Krabi”- Key Relevant Annual Benchmarking Indicators)
 Centers of excellence (experts) → standards of performance
- 21 key activities
- experts from all over Veolia’s geographies
 Standards
- essential principles
- best practices
32
2016 – 2018: Operating performance: Benchmarking
Drinking water network efficiency
33
2016 – 2018: Operating performance: Centers of Excellence
Hazardous Waste
Key Performance Factors

SARPI
Optimize the treatment
capacity for different types of
waste
T&P
UK

UK
Optimize energy by dosing air
& water
1
NA
2
GE SARPI
VEI
(Switzerland)
China

2
ASIA
13
5
Hong Kong
USA
Facilitate operations
monitoring
LATAM
1

Reduce wastewater by
recycling
ANZ
1
Asia

Optimize asset maintenance skin temperature monitoring
Latam
Australia/NZ
34
2016 – 2018: Operating performance: 3 + 1 steps
 Action objective: one plan per site / contract
 Creation of an internal platform
- diffusion of information
- transversal
 The newest and most decentralized approach
35
Operating performance: Example of actions
 Warsaw (Poland): improving the operating performance of the Warsaw district
heating network by reducing convection heat losses, and reducing the electricity
consumption of pumping stations (€4.2m)
 SARP (France): single-operator truck plan for the sewage network (€1.7m)
 Ellesmere Port (UK): expansion to include the ability to incinerate low-level
radioactive waste (low volumes, high added value) in a hazardous waste
incinerator (€1.7m)
 Garston (UK): change of the hazardous waste treatment unit to broaden the mix
of acceptable entry-flow waste (€0.8m)
 Colombia: reorganization of trips to optimize road trucks (€0.1m)
36
Conclusion
 Same level of effort as for the previous plan
- ≈ €200 m/year
 A change of attitude and culture
- really started mid-2013
37
Q&A session
38
Veolia's strategy
to capture future
growth
Laurent Auguste, Senior
Executive, Vice President
Innovation and Markets
39
A 2-year strategic planning process guiding resource allocation
Methodology
Prioritary growth themes
Oil & Gas
Chemicals
Mining Metals
Power
Food & Bev
Pharma
Traditional
activities
+
Circular
economy
Out of ~260 growth opportunities identified by the
countries, ~150 were prioritized based on:
1. their match with the Group’s priorities
2. the associated risks
3. the return on investment over the 2016-2021
period
Ranking of projects based on financial return
ROCE (%)
Difficult
pollutions
Managing the end of
industrial cycles,
Dismantling
New municipal
business
models
Capex (€m)
40
Veolia’s markets dynamics
Cities
Industries
(boosters)
(boosters, specific offers)
+
Resilient
 Emerging countries:
growing cities in need of
support for their
development
 Developed countries:
cities requiring efficiency,
attractiveness, and
economic and social
development
+
Core offers
Traditional Models
Inclusive
Construction
 Pollution becoming
increasingly difficult to treat
 Increasingly rare resources
Smart
Operation/
Services
New Models
Circular
 Pressure on license to
operate
 Growing needs of efficiency
and performance
Value sharing
Livable
41
Our markets – geographic dynamics
2015 est. revenue (€bn)
Northern Europe
UK & Ireland
2.5
2.5
2.2
2.2
Muni
Muni
Indus
Indus
North America
1.8
France
5.4
5.4
Asia
1.8
Central Europe
2.9
Muni
1.3
1.3
2.9
Muni
Muni
Indus
Muni
Indus
Global Businesses
5.1
Latin America, Iberia, Italy
1.7
5.1
Muni
Indus
Indus
Africa & Middle East
1.7
1.2
1.2
Muni
Australia & New Zealand
Muni
1.0
1.0
Muni
Indus
Indus
Indus
Indus
Water
Waste
Energy
Multi business
42
Cities of emerging countries: Support their development, while
carefully selecting opportunities
Major trends
Veolia’s strategy
 New delegated management (or concession)
opportunities for our 3 businesses in Eastern
Europe
Political
context
Regulatory
context
Other
changes
 Growing trend towards regulation (particularly on
margins) in these countries, driven by the European
Commission
 Select targets according to their potential and level of risk
(adapt contractual models to country risks)
 Focus on our businesses and on water
resources issues, access to energy and waste
by many NGOs, World Bank equivalents, and
social and environmental responsibility actions
taken by companies
 Bring out new models and partnerships/alliances
allowing a presence in developing countries without being
exposed to concession-based models
 Enhancement of regulations on environmental
protection
 Strengthening of coercive actions (e.g. China,
Latam)
 Demographic boom of cities leading to growing
infrastructure and operation requirements
 Emergence of Africa
 Need to improve resilience in response to disaster
risks
 Promote the social dimension of our businesses and of
our supporting role in the economic and social
development of cities
 Positioning on assistance with resilience
43
Example 1
Africa and Middle East: Support the economic and demographic growth of
cities with suitable contractual models
Key market trends
 Africa
‒ Strong market growth: many infrastructure projects to cope with
demographic boom & urbanization; social issues (access to services, price)
‒ External funding available for the development of water and waste
services
 Middle East
‒ Economic growth and expanding cities
‒ Large infrastructure programs (e.g. Dubai 2020)
‒ Environmental awareness: protection of resources (energy, water)
‒ The world's largest cooling network market, expected to triple by 2030
2015 Municipal revenue
€1.0bn
Clients’ expectations
 Africa: Financing solutions and/ or new contractual modes; social

solutions (access to services, social tariffs); increasing demand for the
creation and management of landfills
Middle East: Long-term support for new infrastructures; innovation and
image (e.g. “smart cities”: Dubaï, Abu Dhabi, Doha, etc.)
Veolia’s offering and differentiating factors
 Africa
‒DBO/O&M/ affermage contracts: electricity, drinking water, waste
water; standard/ high quality landfilling
‒Innovative contractual models: lease contracts for the production
and distribution of water, performance contracts
 Middle East
‒O&M ; BOT desalination, wastewater; cooling networks
(AssetCo/ OpCo)
‒Smart offer
44
Example 2
Buenos Aires (Argentina): A comprehensive urban cleaning service

The challenge
 Buenos Aires, flagship city of a continent undergoing economic
and urban expansion, is facing the challenges of a very large
city keen on ensuring the quality of life of its inhabitants,
environmental preservation, but also economic efficiency and
attractiveness
 Among these challenges, efficient waste collection and
cleanliness of the public spaces is a key element that is
becoming increasingly complex to manage for a city of that size
The contract

 Client: Autonomous City of Buenos Aires
 Scope: Waste collection and urban cleaning services in the
city of Buenos Aires (historic neighborhoods of Retiro, San
Nicolás, Puerto Madero, San Telmo, Monserrat and
Constitución)
 From October 2014, Veolia has been implementing its technical
capability and the expertise required by waste management in
such a dense and complex urban area, coping with heavy traffic
areas, the important economic and touristic activities, and the
need to accommodate important security concerns
 Duration: 10 years

 Total revenue : €500m
Veolia’s solution
Client benefits
 Preservation of the urban environment
 Enhanced service performance and cleanliness
6 districts
206,000
residents served
Population of
1,5 million people
 Compliance with contractual requirements and regulations
 Enhanced attractiveness of the city (tourism, business)
45
Cities in developed countries: Be a catalyst for their attractiveness
and their economic and social development
Major trends
Political
context
 Maturity of the utilities management market, resulting
in a demand for price reductions
 Pressure on public finances
 Competition between territories, customers looking for
distinctive solutions
 Increased expectation of transparency
 Political discourse focused on environment and
sustainable development
 Demand for social solutions
 Ageing infrastructures
Regulatory
context
 End of landfilling, regulatory (and social) pressure in
favor of circular economy in Europe
 Regulation favorable to the protection of resources
 Regulatory pressure on energy efficiency, widespread
support for renewable energies
Veolia’s strategy
 Leverage our added value and our
differentiation
 Supporting
role in economic and social development of
cities
 Innovation
and new offers (e.g. smart city, resilience)
 Adapt our business models
 New
contractual models based on performance and
value sharing
 Transition
from landfill to the circular economy
 Positioning
on energy efficiency, biomass/ biogas
offers
 Develop synergies between our 3 businesses
Other
evolutions
 Changes in individual behaviors (recycling,
empowerment, collaborative economy, prosumers)
 New services and players associated with digital
 Need to improve resilience to cope with disaster risks
 Enhance customer relations and services to
end-users
46
Example 1
Greater Lille (France): Drinking water management
The challenge
 Through a tender organized in 2013, the Greater Lille urban
area required highly efficient operation, strong social
commitments, and greater transparency of the future operator
of the water distribution service
Veolia’s solution
 Smart Water Box: creation of an ultramodern control center
that will integrate all distribution networks and water
production plants in order to provide real coordination
between production and supply. Set-up of a network of
localized smart, connected sensors to ensure monitoring,
traceability and continuous checking of the water
 Innovative pricing system: “Eco-solidarity” pricing and
reduced subscription rate for residential customers
The contract
 Client: Métropole Européenne de Lille, 62 municipalities
 Scope: Manage the water service, operate and maintain the
distribution networks and water production plants
 Total revenue: €450 million
The contract
services a
population
> 1 million
Target to raise
network efficiency
(3 million m3
saved/yr)
1,000 sensors to
find leaks
 New form of governance that brings together users, elected
officials, and city-dwellers to decide on strategic guidelines.
Decision-making will be made more efficient and the service
will match the needs of users as closely as possible
Client benefits
 Environmental protection: in the long term, almost 3 million
cubic meters of water will be saved, notably through an
important reduction in network leaks
 In a particularly innovative move, 65% of the area’s 300,000
customers will benefit from a progressive pricing scheme
and will see their water bill come down
47
Example 2
Hirakawa and Hanamaki (Japan): Two biomass power plants
The challenge
 Japan aims at tripling the share of renewable energies in its
energy mix by 2030 following the phase-out of nuclear power
since the Fukushima disaster
 The cities of Hirakawa and Hanamaki in particular, in search
of effectiveness, competitiveness and attractiveness, have
the objective to increase the production of renewable energy
Veolia’s solution
 Circular and local use of resources: the wood used to fire
the boilers comes from neighboring forestry industries. Veolia
brings its know-how in biomass operation and will manage
the overall operations
The contracts
 Partner: Takeei (a major Japanese environmental services
company)
 Scope: Two O&M contracts (in the cities of Hirakawa et Hanamaki
in the island of Honshu), under an AssetCo-OpCo model
 Total revenue: € 90 million
100 GWh
electricity
produced per
year
Energy
equivalent to
22,000
households
40,000 metric
tons of CO2
avoided each
year
 Innovative and attractive business model for cities
(AssetCo-OpCo):
 Innovative financing package, in which funding is provided
by the Asset Company held by Takeei associated with
municipalities and local foresters
 Operations are undertaken by Veolia via an “Operating
Company” providing operational performance
Client benefits
 Environmental protection: these two plants will avoid the
emission of 40,000 metric tons of CO2 each year;
diversification of the country's energy sources and mix
 Job creation: 40 permanent employees on site
48
Industrial customers: Take advantage of favorable trends linked to
pressure on license to operate and growing efficiency requirements
Major trends
Veolia’s strategy
 Impact of NGOs, internet/transparency, responsible
investors, on the reputation of large companies
Societal and
media
pressure
 Questioning of the license to operate of
multinationals, in competition with territories
regarding the use of resources → social and
environmental responsibility, environmental footprint
reduction targets
 Heavy media coverage of major pollution incidents
(BP, Tianjin)
 Concerns about the environment (CO2, water,
oceans) and the increasing scarcity of resources
 Cost volatility of natural resources, search for greater
efficiency and for a reduction of operational and
reputational risks
Regulatory
and
economic
pressure
 Slowdown of economic growth in some economic
sectors (Oil & Gas, Mining) or regions (Brazil, Australia,
China)
 Industry digitization: benchmarks, monitoring/control,
reconfiguration of the value chain
 Opportunity of positioning on consultancy
for industrial clients: a more industrial,
comprehensive and global approach
(e.g. partnership with Danone)
 Positioning on efficiency/asset
enhancement (intra-site or across sites:
circular economy, regional ecology),
performance and value-sharing models
 Push forward with hazardous waste
activities
 Highlight the value of our brand and of
our skills
 End of installations/ equipment lifecycle to be
managed
49
Industrial: Confirmation of the 6 strategic pillars’ relevance and
their potential
3 vertical market segments
Industrial revenue (€bn)
CAGR
+5%
Mining & Metals,
Power
Food & Bev, Pharma
3 transversal themes
11,0
1,5
(14%)
Mining & Metals, Power
1,3
(12%)
Food & Beverage, Pharma
Transversal growth themes
(Difficult Pollutions, Circular
Economy, Dismantling) on other
vertical segments
12,5
CAGR
2,0
(16%)
+10%
1,5
(12%)
+5%
1,0 (8%) +8%
0,8 (7%)
2,6
(24%)
3,1
(25%)
+6%
4,9
(39%)
+2%
Difficult pollutions
Other Industries and Commercial
4,7
(43%)
Circular economy
Managing the end
of industrial cycles/
Dismantling
2015 est.
2018 est.
50
Oil & Gas Industry
Veolia, the only long-term partner on all environmental and efficiency issues
Market drivers
Upstream
 Market highly dependent on oil prices. However, Veolia's activities
are still partially decoupled from overall market movements
 Increasing complexity of extraction
 Growing public and regulatory pressure over environmental impacts
(ex: shale gas and oil in the US)
 End of lifecycle of offshore platforms
Downstream
 Growth in refining capacity (Africa, MEA , Latam), dynamism of
petrochemical activities (US , MEA , Asia)
 Needs for optimization/operational excellence; regulation creating
demand in mature countries
 License to operate
Veolia’s offering and growth objectives
Upstream
 Treatment facilities for injection water treatment and produced
water
 Waste and hazardous waste management
 Industrial services (tank cleaning)
 Decommissioning of installation (especially oil platforms) – Material
recycling and equipment recovery
Downstream
 Process water/ waste water/ cooling water (Construction,
Operation, Mobile solutions; Zero Liquid Discharge solutions)
 Cleaning/ hazardous waste
 Optimization of waste management and energy utilities
 By-products/ waste to energy
Oil & Gas revenue
(€bn)
CAGR
 Maximizing the availability and return of customer’s assets
+10%
 Emergency solutions
 Cost reduction, optimized use of water and resources
2,0
1,5
Veolia’s differentiating factors
 Well-adapted and unmatched portfolio of technologies
 Recognized and unique expertise in operation, ability to provide
guaranteed results or performance over time
 Global network
2015 est.
2018 est.
51
Oil & Gas industry – Case study
Antero: Water treatment for a non-conventional gas project in North America
The challenge
 Antero produces ~52,000 barrels per day of shale gas in
Pennsylvania and Western Virginia (Marcellus and Utica fields)
 Need to find a solution for the treatment of produced water, in
order to reduce the costs of discharge in deep wells, to limit
circulation of trucks, and eliminate the long-term risk linked to
deep well projects (potential regulatory changes)
Veolia’s solution
The contract
 Client: Antero Resources (Shale Oil & Gas production)
 Site: Doddridge county, West Virginia (USA)
 Scope: Treatment and reuse of flowback and produced water;
DBO contract (Design, Build, Operate)
 Date of signature: August 2015
 Duration: 24 months for Design & Build,10 years for Operation
 Total revenue: €343m
 Zero Liquid Discharge plant through a combination of Veolia’s
proprietary cutting-edge technologies: evaporation and
crystallization processes (HPD), MBBR (Anox Kaldnes®),
Actiflo®
 Veolia’s differentiators:
– The solution was designed in cooperation with the client, in the
context of a mutual agreement (no tender)
– None of the other players was able to offer both the adapted
technological solution and a long-term guarantee
Client benefits
Plant capacity:
60,000 barrels
per day
Client cost
savings:
$150,000 per well
Commissioning:
2017
 Completely integrated offer with a guarantee of reliability and
performance
 Reduction of the environmental footprint of the extraction
activities
 Mitigation of the risks of effluent discharge in deep wells
 Cost optimization
52
Mining, Metals and Power Industries
Meet the industry’s requirements of compliance and operational performance
Market drivers
 Lower commodity and steel prices: significant drop in margins and
investment capacity of mining and metallurgy companies, hence a
slowdown of new development projects and a focus on efficiency
 Increase in energy demand in developing countries
 Increasing complexity of extraction
‒ Isolated regions, sometimes in water stress
 Growing public and regulatory pressure about environmental impacts
‒ Problems of license to operate
‒ Management of the end of life of operating sites
‒ Emission control for power plants




Optimization of sites’ margins:
– Reduce costs (ex: reduction of the energy bill which represents ~1015% of the mines’ operating cost and 20-40% for steel)
– Improve yields
Improvement of the environmental footprint and emission controls
Reduction of dismantling costs and the risks of environmental
liability risks
Financial flexibility
 Technology portfolio, covering a large part of the industry needs
(owner and through partnerships): Zero Liquid Discharge, sludge
dehydration from tailing ponds, etc.
 Operational expertise: a guarantee of reliability and differentiation
 Global network (global players: Vale, BHP, Rio Tinto, Arcelor, Tata Steel)
 Ability to work on remote locations
 Ability to provide/ attract funding
Operating mines, metal and power plants
 Water management: installation and operation of water production
plants (ex: desalination) and treatment/ recycling of wastewater
(industrial effluents)
 Optimization of operating performance
 Waste recycling, material recovery
 Efficiency services on utilities: electricity, steam, hot water, airconditioning, compressed air, cooling
 Cleaning: vacuum truck, stripping
 Asset outsourcing/ financial engineering
Post-operations/ dismantling of mines, metal and power plants
 Recovery: soil remediation, site valorization
 Waste water management: Treatment of acid mine drainage, ash
pond management
Mining & Metals and Power revenue
(€bn)
CAGR
+5%
1,5
1,3
2015 est.
2018 est.
53
Mining, Metals and Power Industries – Case study
Energy delivery for Harjavalta Industrial Park (Finland)
Clients’ challenges
 Harjavalta IP is on of the largest metallurgic clusters in Finland,
housing more than a dozen companies employing more than
1,000 people
 The largest customers are Norilsk Nickel (Nickel and
Palladium) and Boliden (Copper). Companies within the
Industrial Park make a strong commitment to both industrial
competitiveness and sustainable development for the future,
taking into account safety, personnel and environment
The contract
Veolia’s solution
 Client: Harjavalta Industrial Park (Finland)
 Site: Harjavalta, Finland
 Scope:
Energy supply management and optimization
 Veolia has step-by-step managed to modernize the energy
production in the park within the framework of their long-term
commitment :
– In 2011, a new 20 MW boiler plant was built to meet the
future energy needs of the park and create a more reliable
and flexible production
– In 2015, Veolia and Norilsk Nickel agreed to install a new 30
MW boiler plant to burn wood pellets for delivery of steam.
The new boiler will reduce the energy costs and CO2
emissions of the park through reducing its dependency on
fuel oil
−
−
−
−
−
Energy production and optimization of energy flows.
Development of new energy supply solutions
Production of compressed air (installed capacity 9,5 MWe or 140 000 m3/h)
Cooling water, potable water and demineralized water exceeding 10 million m3
per annum
Heat recovery utilized as district heating in town of Harjavalta
 Duration: since 2000 (contract renewed in 2015)
 Revenue: ~€36m/yr
Reduction
of the park’s
environmental
impact
600 GWh of
steam and hot
water supply
Client benefits
Eliminating usage
of fossil fuel
 Reduced energy consumption and costs
 Reduced environmental impact in accordance with the
industrial park’s vision. CO2 emissions expected to be reduced
by 70,000 tons per year
54
Food & Beverage and Pharma/Cosmetics industries
Veolia, the integrator of multi-business solutions that secure license to operate,
performance, and brand image improvement
Market drivers
Food & Beverage
 Largest industrial sector in the world; present in all geographies
 Market that is constantly growing since it is intrinsically linked to demographic
growth and a rising average standard of living
 Highly fragmented industry
Pharma and Cosmetics
 Market growth linked to drug accessibility in developing countries
 In developed countries, firms are reducing their costs and enhancing their
efficiency due to the pressure of generic drugs
Mature markets (North America, Europe, Australia)
 Operational optimization of existing assets
 Compliance with changes in legislation and environmental demands
 Brand reputation and CSR
 Improving the traceability of products and limiting operational risks
Growth markets (Asia, Latin America, Africa)
 Rapid development of production
 License to operate
 Minimal use of water – particularly in the beverage sector
 Energy efficiency; material efficiency, waste management and traceability
 Operational performance enhancement, in particular via
use of resource optimization
 Yield improvement and creation of new revenue sources
(Waste to Energy)
 Construction and operation of treatment facilities in
emerging countries
 Reduction of the environmental footprint
Food & Beverage and Pharma revenue
(€bn)
CAGR
+8%
1,0
0.8
Veolia’ differentiating factors
 Large portfolio of technologies and services
 Unique ability to offer integrated solutions (water, waste, energy, recycling)
 Synergies with the municipal business
 Advanced know-how in the management and preservation of resources
2015 est.
2018 est.
55
Food & Beverage industry – Case study
Alliance on value creation with Danone
The challenge
 Reaching Danone’s 2020 main objectives:
–
Carbon footprint reduced by 50% (vs. 2007)
–
Energy intensity reduced by 60% (vs. 2000)
–
Water intensity reduced by 60% (vs. 2000)
–
25% recycled plastic in bottled water
Veolia’s solution
The alliance
 Sites: all Danone activities worldwide - more than 160 sites
 Scope: water cycle management, waste management (incl.
plastic recycling), organic waste/ sustainable agriculture, energy
efficiency
 Duration: undefined
 Unprecedented joint entrepreneurial approach to identify and
deliver the best value-creating initiatives
 Examples:
–
Designing and operating zero water dairy plants in every
continent
–
Being the champion of high standard recycling loops on
plastics
–
Social innovation to improve services and reduce risks
 Veolia’s differentiators: combined consulting, engineering and
operational capabilities; expertise on Water, Waste and
Energy; global network
Client benefits
All Danone’s
activities
170 sites
worldwide
10 projects to be
launched in 2016
 Strengthening Danone’s competitive advantage :
− Ex: Significant EBITDA impact by maximizing value creation
of every major project of Danone
 Reinforcement of Danone’s license to operate
–
Ex: Reduction of operational & reputational risks
56
Circular economy
Veolia, helping clients create value by going circular
Market drivers
 Pressure on resources (demographic growth, waste)
 Favorable regulation in mature countries
 In China, environmental damages awareness make regulation evolving
towards the development of a sustainable economy
 Societal evolution towards circular, collaborative and functional
economy (from ownership to usage, local resources recycling, repair,
pooling of equipment and spaces,…)
All actors
 Compliance with increasingly stringent regulations
Territories & Cities
 Exemplary solutions for climate, budget optimization, economic
attractiveness of territories, job creation, social tie between inhab.
Industries
 Commitment to the creation of shared value with local communities
(population, cities) and concrete environmental impact
 Return and economic efficiency
 Licence to operate and safety of supply
Supply of materials and products made from waste, wastewater and
of unavoidable energy
 Specialty materials (plastics, cardboard, rare and strategic metals
from electric and electronic equipment waste and hazardous waste,
building materials, solvents...)
 Organics (deconditioning of bio-waste, compost, fertilizer, animal
feed,...)
 Fuels and energy (CSR, biogas, biomass, electricity,...)
Engineering, design and implementation of bespoke solutions to
help cities and industrials preserve and renew resources
 Integrated resource management of a client
 Pooling of multi-client platforms (territorial ecology / industrial
symbiosis, green heating networks, reuse of industrial water)
 Energy and electric efficiency
Circular Economy revenue (industrial & municipal)
(€bn)
CAGR
+10%
3.5
 Integrated capabilities going beyond traditional silos (Cities/ Industrial;
Water/ Energy/ Waste)
 Wide and adapted portfolio of technologies and expertise
 Global network (global industrial clients), access to waste fields
 Industrial strategies on targeted sectors (ex: plastics)
 Agility, tailor-made services and pilot trials with partners (technological
innovations and differentiating models) to keep competitive edge
4.6
Municipal
O&G, Mining, Metals,
Food & Bev, Pharma
Other industrial
2015 est.
2018 est.
57
Circular Economy – Case study
Customized recycling of high quality polypropylene
AKG Kunststof Groep (the Netherlands)
 The “Circular Economy package” prepared by the European
Commission should lead to a significant increase in objects
made from recycled plastics. The gradual extension of sorting
instructions should increase the volumes of PP(1) collected and
sorted
 In Europe, capacity for recycling PP(1) remains insufficient to
respond to the demand of manufacturing companies (Renault,
Philips, L’Oréal, etc…) that increasingly want to adopt
programs that incorporate recycled materials in their production
processes, as a move towards the circular economy
Activities
 Site: Vroomshoop (the Netherlands)
 Advanced sorting of Polypropylene and Polyethylene
(Liquisort® sorting process)
 Reformulation (granulation, mixes, extrusion) of high-quality
resins
Veolia’s differentiators
 State-of-the-art equipped laboratory, providing comprehensive
analysis in each stage of the production process, in
combination with highly developed formulation skills, as well as
advanced separation technologies to match clients’ needs
 Access to supplies of plastic waste coming out of the collection
and sorting operations
 Ability to commit to supplying volumes
Staff: 53
37 kt of
plastics
recycled in
2014
€34m revenue
in 2014
 AKG’s capabilities complement the plastic recycling value
chain: the Vroomshoop facility will be the cornerstone for the
expansion of Veolia’s European platform of recycled plastic
materials manufacturing
1 Polypropylene
58
Difficult pollutions – Hazardous Waste
Densify our network and expand in developing countries
Market drivers
 Cost optimization; mitigation of the environmental
 Favorable regulatory evolutions:
International: Basel Convention on cross-border waste shipment
− European: 2008/98/EC Directive and 2001/573/EC Decision on the classification of
waste
− Local: on health expectations, safety, transport and treatment, and specific pollutants
(mercury, radioactive waste, special organic waste, etc.)
Volumes mainly made of:
− Chemical, Oil & Gas, Metallurgical and Nuclear industries’ waste (going through
cycles)
− Electric and Electronic waste from households, growing
− Hospital waste, growing thanks to demographic evolution and aging population
−



liabilities risks
Needs for the right treatment process: appropriate,
compliant to regulations, comprehensive
Improvement of environmental footprint
 Network densification and optimization/ saturation
of assets
 Diversification of customer segments served
 Platforms connecting small customers to large
treatment plants/ recycling
 Expertise and development of niche activity
Growth areas
North America
• Optimization of
existing assets, Oil &
Gas projects
UK & Ireland
• Development on niche
markets (complex
types of waste)
Latin America
• Development from RIMSA in
Mexico
New activity
France and rest of Europe (SARPI, SARP) :
• Consolidation of the European treatment
platform, extension/ densification of network
• Expertise and niche markets
Hazardous waste
revenue (€bn)
CAGR
+6%
Asia (China)
• 6 sites presently in operation,
3 in operation by 2016
• AssetCo/ OpCo deals
1.8
1.5
Africa – Middle East
• O&G: Drilling sludge treatment
• Projects of platform and
treatment centers
New activity
Australia
• Capture industrial
volumes
2015
est.
2018
est.
59
Difficult pollutions – Case study
Expansion of the European platform for the treatment of Hazardous Waste with
the acquisition of an incinerator in Spain
 The region around Constanti (including the Tarragona
petrochemicals complex where the Constanti facility is located)
concentrates 40% of Spain’s chemicals and pharmaceuticals
business, and 30% of its automobile production, which together
generate a high volume of liquid, solid and sludge hazardous
waste from their industrial processes
 For these industries, treating hazardous waste and securing
the supply of recycled materials are crucial
Veolia’s differentiators




Site: Constanti, Catalonia (Spain)
The only incinerator that treats hazardous waste in Spain
Annual treatment capacity of 60,000 metric tons
Acquisition by Veolia in Dec. 2014
Sarpi, one of the leaders of Hazardous Waste in Europe
65 sites
in 10 European
countries
2,500 experts
in the field of
Hazardous
Waste
More than 10,000
clients
 To serve the industries, Veolia has created and rolled out a
European platform for the treatment of Hazardous Waste, now
comprised of 65 sites in France, England, Ireland, Belgium,
Germany, Switzerland, Italy, Poland, Hungary and Spain
 A pioneer in hazardous waste treatment for 40 years, the
Group has adopted a Europe-wide approach by significantly
specializing its facilities, which complement each other and
work together on a daily basis across the entire Continent
 This specialization meets the requirements of Europe’s major
industrial sectors, such as, chemicals, pharmaceuticals,
automobile and energy
 Veolia’s strategy provides industrial concerns with a major
advantage and makes it possible to meet specific needs while
at the same time renewing conventional economic models
60
Managing the ends of industrial cycles
Veolia, a reliable integrator throughout the value chain (dismantling,
compliance, material recovery)
Market drivers
Increasing number of out-of-date, obsolete equipment and industrial
areas or having undergone natural or industrial disasters with a
contamination risk
 Heavy mobile equipment:
− Ships: dynamic market – acceleration of the disposal of ships due to an
overcapacity of shipping market
− Trains: market growth in countries where asbestos pollution makes disposal
of trains impossible (ex: France)
 Industrial facilities and wastelands
− Refineries: end of lifecycle of a large number of facilities; more stringent
environmental regulations
− Electrical power stations (coal, nuclear): national policy of nuclear energy
phase-out (Germany, Japan) and objectives of closures of coal power plant
for environmental reasons (Europe, US)
− Other industrial sites: end of industrial lifecycle in developed countries
(ex: refineries, metallurgy,...)
 Waste treatment, including difficult pollutants
 Recycling to optimize asset value
 Dismantling of trains (France)
 Compliance solutions geared towards minimizing
environmental and conformity risks
 Soil remediation activities
Dismantling revenue
(€bn)
CAGR
+17%
0.15
 Avoiding contamination risks
 Optimizing materials recycling and reuse of equipment (locally and
at a lesser cost)
0.09
 Soil remediation to launch new activities
 Recognized expertise and technologies in soil remediation,
characterization, management, treatment and recycling of waste and
management of dangerous pollution (nuclear, asbestos...)
2015 est.
2018 est.
 Project management across the value chain – until total control of
downstream: traceability and responsibility on waste
61
Managing the ends of industrial lifecycles – Case study
Offshore platforms decommissioning in the North Sea
The challenge
 When oil and gas fields end production, facilities need to be
dismantled and disposed of - or "decommissioned”
 For this project Shell UK Ltd were decommissioning assets
from the Indefatigable field in the North Sea
Veolia’s solution
The contract
 Client: Shell UK Ltd
 Site: Wallsend - Newcastle
 Scope: Decommissioning eight gas field ‘jackets’ (rig legs)
and eight topside structures
 Duration: 9 months (2011)
 Total revenue: €5.6 million
 Expertise: Decontamination & Demolition, NORM / Mercury
Management, Trading for recycle / re-use
Decontamination
& demolition of 8
gas field “jackets”
and topsides
structures
12,000 tons of
structures in
total
Project
accomplished in
9 months
 Decontamination and demolition of the 8 gas field ‘jackets’ and
8 topside structures with a total tonnage of around 12,000,
including complete NORM1 and Mercury management
 The work was carried out at the former Swan Hunter shipyard
at Wallsend, near Newcastle. Veolia UK operated the facility
under an Environment Agency permit with a bespoke health
and safety and environmental management system and
comprehensive environmental reporting
 In-house capability to manage all waste streams (Veolia assets
include landfill and incinerator for NORM1)
Client benefits
 Risk and cost reduction
 Efficient management of the decommissioning process with
maximum material reuse and recycling
 Total waste management for materials assessment,
deconstruction & dismantling, separation, treatment, removal,
valorization / disposal of non-hazardous and hazardous waste
including asbestos and NORM1
1
Naturally Occurring Radioactive Materials
62
A business dynamic fueled by innovation
Internal innovation network
(launched end 2014)
Research Projects aligned with the
strategy and the range of offers
Examples of on-going innovation
programs
External
innovation
→ Smart City (e.g. Analytics,
Algorithms for Water and
Energy)
Research
&
Innovation
→ Oil & Gas (e.g. SaphiraTM,
Ceramic Membranes)
Veolia
R&I
projects
→ Circular Economy
(e.g. WEEE-Waste Electrical and
Electronic Equipment)
→ Difficult pollutions
(e.g. Carbon Capture and
Storage, FrogBox for endocrine
disruptors), etc.
63
Q&A session
64
Coffee break
65
Business review
illustration
Managers, introduced by
Antoine Frérot
66
Resourcing the World in Asia
Regis Calmels, Senior Executive Vice President Asia
Julia Gü, Head of China Concessions
Anne Kwang, Head of Hazardous Waste China
Veolia’s presence in Asia
Est. 2015 Revenue by activity (€m)
Total
Consolidated Revenue
799
208
243
1,250
Managed Revenue1
785
-
45
2,080
€374m revenue
Japan
€502m revenue
South
Korea
China
€22m revenue
India
€195m revenue
Taiwan
Hong Kong
€76m revenue
Waste activity
Water activity
Energy activity
1
Singapore
€81m revenue
Including our proportionate share of revenue in all projects.
68
History of Veolia in Asia: Some key dates
1995
1997
Tianjin CGE
China
Mainland
2000
2002
Pudong
2005
2005
Tianjin Hazardous
Puxi Shanghai
Waste
WTE
Hong
Kong
2000
SENT Landfill
Japan
2002
Jenets
South
Korea
Singapore
India
1999
Waste Collection,
Pasir Ris Tampines
2001
Incheon WWTP &
SK Hynix
2015
2007
2003
2003
Laogang Landfill
2000
LG/Lotte
Chemical
2010
Harbin District
Heating
2008
2010
Tianjin Soda
Foshan Landfill
2009
Chemical
Waste Treatment
Facilities
2006
Hiroshima WWTP & Showa
Denko
2007
Ecocycle
2006
Showa Denko
HD
2008
Street Cleaning in North
Western & Central Region
2005
Karnataka Urban
Water Sector Project
2011
Kai Tak
District
Cooling
2014
Hong Kong Sludge
Treatment Facility
2014
Hakone Full
Drinking Water
Services
2014
DH Recycling
2015
Tsugaru &
Hanamaki Biomass
Energy
2014
Hongwon
Paper
2013
Waste Collection
Clementi
2015
Exxon Mobil
Tar Tank Cleaning
2012
Nagpur Water Utility &
2013
Nilothi WWTP
Nangloi Water
Utility
69
69
Market trends and priority development axes in Asia (1/2)
Taking advantage of stricter environmental requirements in China
Market development trends
 Rate of urbanization growing very strongly (~70% in 2035)
 Sharp increase in regulation in the area of environmental
protection
 Growing public awareness leading O&G and Steel & Metals
industry to care for social license to operate
2nd
 China ranked
on the worldwide market for heating
networks, a market expected to double by 2021
 Emerging market for gas cogeneration
Our priority development axes
Circular Economy, Power Heat Generation from Heat
Recovery in Industrial Processes or Biomass
Gas Cogeneration
Distribution of heat to end users.
Circular economy (Water reuse / ZLD), Oil & Gas Downstream,
Coal to X, Steel and Metals Industries.
Treatment of difficult pollutions-Hazardous Waste & Soil
Remediation
Circular Economy – Recovery of materials
Addressing growing need for efficiency in Japan
 Municipal water market : facing decline of population,
municipalities need to improve efficiency of their operations
Energy: cogeneration of electricity from biomass
 Industry: major industrial country facing competitive pressure
and need for greater efficiency
Municipal water: affermage type contracts for medium size
cities
 Energy: governmental incentives to develop new sources of
energy (biomass, etc.)
Industrial water: several projects in key growth themes: O&G,
ME, Steel, F&B, Power
Energy savings for industries facing international competition
70
70
Market trends and priority development axes in Asia (2/2)
Addressing growing need for efficiency in South Korea
 Industry: major industrial country facing competitive pressure
and need for greater efficiency
District Energy Network to Industrial and Tertiary Customers
Multi-Business Industrial Services
Solid Waste – Circular Economy
Industrial Services
Industrial Water
Supporting Oil & Gas production increases in Singapore
 Economy highly dependent on exports
 Largest hub for merchant marine vessel
Oil & Gas Upstream in conventional oil field
Waste: Industrial Services, Oily Sludge treatment
 Large manufacturing base (O&G, top 3 refining base in the
world, chemistry) and presence of MNCs
Addressing need for basic infrastructure in India
 Increase in regulation in the area of environmental protection
 But: political risk due to complexity of the institutions and eventual
responsibility placed at local state / municipal corporation level.
Water infrastructure design & build, performance contracts
Industrial Services
71
71
Asia - Differentiating Factors & Development focus
A solid existing platform
 A solid existing platform allowing us to leverage our current activities to capture
opportunities
−
−
Long lasting relationships with public authorities and with some important local industries
Veolia know how and reputation, valuable to public and private potential customers
Development focus on Industrial

Further develop Industrial business:
−
−
Growing needs of efficiency and performance of Industries
Pollution issues and challenges associated with license to operate
 30% average annual growth expected from 2015-2018
 Main focus on :
−
−
−
−
Industrial Water
Hazardous Waste
Energy efficiency for Industries
Biomass CHP
72
ASIA - Portfolio Evolution: Industrial clients to grow from 35% to
44% in 2018
2015
Industrial
35%
2018
17%
64%
19%
Industrial
44%
Municipal
65%
2015 est.
consolidated revenue
€1.250m
Revenue Growth +17% CAGR
of which Industrial +30%
Municipal +10%
26%
Municipal
56%
46%
28%
2018 est.
consolidated
revenue
€2.1bn
Examples of growth projects
Municipal Water
Circular Economy – Water Reuse and Zero Liquid Discharge
Circular Economy – Recovery of materials from solid Waste
Difficult Pollutions – Hazardous Waste and Soil Remediation
District Energy: District Heating Networks
Energy efficiency in industrial Utilities
Energy from renewables: Biomass CHP and Heat Recovery
73
China mainland: Business overview
Veolia’s presence
Key figures
39%
39%
22%
2015 total est.
revenue: €502m
 Around 60 contracts
Waste Activity
Water Activity
 15,700 employees
Energy Activity
74
China - Hazardous waste: A growing market driven by regulation
 The market
− Market is estimated at 7 million ton per year, of which 60% is “internally treated”
− The real market of Hazardous Waste is 40% of 7 million tons i.e. ~3 MT pa
− Veolia’s market share is currently around 8%.
− Upon completion of new projects which are under construction, Veolia’s share is
expected to reach 12% in 2016 and 17% in 2018
 New environmental regulations
− New Environmental Protection law of PRC, effective January 2015
− Opinions of the General Office of the State Council, on Promoting the Third-party
Treatment of Environmental Pollution, effective December 2015
− Action Plan for Water Pollution Prevention, effective May 2015
− Action Plan for Soil Environmental Protection and Pollution Prevention (will be
enacted soon)
75
China : Veolia’s Hazardous Waste Treatment Facilities
Tianjin Hejia
(operational)
Cangzhou
(under construction)
Tianjin Binhai
(operational)
Nanjing
(in testing & commissioning
phase)
Hangzhou Lijia
(operational)
Changsha
(in testing & commissioning
phase)
Huizhou Phase 1
(operational)
Huizhou Phase 2
(under design)
Foshan MW
(operational)
Hong Kong HW
(operational)
Tonnes per year
Incineration
PCT
Landfill
6 presently in operation
105,000
53,000
66,000
2 in operation in 2016
68,000
32,000
33,000
2 in operation in 2/3 years
42,000
20,000
80,000
Total
215,000
105,000
179,000
76
China: Long term foreseeable growth in Municipal water
 Water supplied in 2014 in China: 3.88bn m3
 i.e. 45% of the volumes supplied by Veolia worldwide in 2014
 Average growth of volumes sold through concessions since starting operations
> 2.5% per year
 Average Tariff Applied globally through all Veolia concessions:
CAGR 2002- 2015 >5%
 Improvement of O&M Efficiency: case of Pudong
 Resilience of Value of Assets: case of Changle
77
China: Improvement of O&M efficiency: Case of Pudong
2002
2014
Service Area (km²)
+110%
319
672
Network Length (km)
+144%
1,975
4,823
No. of Water Meters
+124%
573,000
1,282,325
Sales Volume (Mm3)
+53%
277
424
# Employees
-12%
1,136
999
78
China: 9 water Concessions: Strong overall profitability
improvement expected
Proportionate revenue (€m)
Proportionate EBITDA (€m)
>5% revenue CAGR
expected 2015-2018
~15% EBITDA CAGR
expected 2015-2018
>900
>200
737
565
140
101
2014
2015 est.
2018 est.
2014
2015 est.
2018 est.
79
79
China: Hazardous waste and municipal water activities
Municipal water activities
Hazardous waste activities
Huizhou
Pudong, Shanghai
Shenzhen
Urumqi
Tianjin
Foshan
Hangzhou
80
Resourcing the World in the UK
Estelle Brachlianoff, Senior Executive Vice
President UK & Ireland
Richard Kirkman, Technical Director
Veolia UK profile
TBU
Major M&A in recent years
2015 est. UK revenue ~£2bn (~€2.4bn)
7%
5%
Service to
water co.
5%
7%
Energy
Services Ind Haz
5%
WS&T 7%
3% Landfill
7%
9%
1995
Wins Hampshire PFI
2007
Successful Cleanaway
acquisition (waste)
Municipal
17%
Dry waste
treatment
33%
81%
1990
Veolia enters the UK waste
market
Commercial
14%
80% waste
2008
Selling to MITIE of the
Facility Management
business (Dalkia)
Energy
Water
Water Solutions & Technology
2012
Selling of the water regulated
business (water)
Waste (80% of the business)
82
Our customers
2015 est. UK revenue ~£2bn
Municipal
Circa 65,000 customers
Industrial
25%
58%
17%
Commercial
Municipal and Regulated
Industrial
Commercial
83
Main growth offers
For industrial customers and water companies
 Resource efficiency & resilience
For municipalities
 Local loops of energy and materials around PFI assets
For commercial customers
 Zero waste to landfill solutions
84
Resource efficiency & resilience for industrial customers
Market drivers/ context:
 Intensive international competition
 Efficiency, resilience & security of supply are key
Value proposal
 Resource efficiency:
− Cost savings & value creation with lower environmental footprint
 Resilience, risk mitigation:
− Business continuity via long-term security of supply (purified
water, energy)
− Risk mitigation for complex pollutions (haz waste, CO2)
Our differentiator
 Long term trusted partner
 One stop shop/ cross-selling
 Unique technology/ co-design
 Key assets
 Key references:
‒ GSK, AZ, Siemens, Diageo, Dairy Crest
85
Local loops of energy and materials around PFI assets
 Veolia very successful developing waste PFI, based on municipal
needs
 Key assets built:
− Energy from Waste, Materials Recovery Facilities, Waste Water
Treatment Plants, etc.
 Austerity measures, “more for less”, sourcing new revenue
Value proposal
 New sources of revenue, value creation through waste “mining” &
transformation:
− Local loop of energy:
•
Power to grid, private wiring, private district heating, Anaerobic
Digestion
− Local loop of materials:
•
Plastic, paper/ fiber, glass transformation
Our differentiator
 Securisation of long term supply and price v volatility
 “Green” resilient energy/ materials supply
 Key assets/ PFI
 Technology bundling
 Key references:
− Sheffield, Southwark
86
Zero waste to landfill solutions for commercial customers
 Intensive competition
 Landfill increasingly expansive
1
2
Energy from Waste
Refuse Derived Fuel
Value proposal
 Cost savings through zero waste to
landfill solutions, through production of:
− Fuel
• For EfW1 or biomass or RDF2
− Recyclates
• Paper/ card, glass, plastic
− Organic soup
• as fuel for AD
− Fertilizer
Our differentiator
 Internalisation through PFI assets
 Size effect to negotiate off-take with
merchant plants
 Logistic network
 Customer service
 Key references:
− Mc Donald’s, Sainsbury
87
Snapshot of the waste PFI business
UK landfill tax evolution
Landfill volumes1
£90
100%
£80
£80
£80
80%
70%
Tonnages (%)
Price (£m)
£60
£50
£40
£30
£10
34% of all municipal
waste to landfill
90%
£70
£20
79% of all municipal
waste to landfill
60%
50%
40%
30%
20%
£7
£7
10%
£0
0%
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2000/01
2002/03
Year
2004/05
2006/07
2008/09
2010/11
2012/13
2014/15
Year
1
England only
Landfill – remaining void capacity
1
23%
FCC (1)
Viridor
47%
Biffa
9%
8%
1
Sita (1)
Veolia
1
6%
7%
Other (1)
Estimated 612 million m 3
void capacity remaining
1
Estimated based on Veolia marketing intelligence
88
Snapshot of the waste PFI business
PFI market shares
There are currently 33 operational
PFI projects in the UK
3.8m
6%
Households
served
9.5m
THE MARKET LEADER
13
Integrated
contracts
£533.8m
Revenue
Leeds
Sheffield
Staffordshire
Nottinghamshire
Telford
and Wrekin
Birmingham
Shropshire
Hertfordshire
West Berkshire
Hampshire
25%
6%
People
served
Merseyside
2% 1%
East Sussex
8%
21%
of market in terms of
tonnages treated
9%
27%
in terms of PFI credits
approved
21%
9%
13%
Veolia
Suez
Shanks
Urbaser & Balfour Beatty
AmeyCespa
Viridor
FCC Environment
MVV Umwelt
Biffa
Global Renewables
89
Major PFI construction projects
Shropshire
Leeds
Hertfordshire
Current status: Completed
Current status: Under construction
Current status: Plan B in preparation
Coming online: 2015
Coming online: 2015
Contract length: 27 years
Houses powered: 10,000 homes
Houses powered: 20,000 homes
Tonnage: Divert 90,000 tonnes of
waste away from landfill
Tonnage: Divert 214,000 tonnes of
waste away from landfill
90
PFI business model
Comprehensive scope
Type of contract
Revenue stream
 A global solution to treat
municipal waste
(recycling, refuse, green
etc.) for a county or
unitary authority
 Veolia to find a solution,
appropriate site, obtain
planning permission,
financing, construction
and operates
 Fixed fee + variable based
on municipality tonnages
 Includes usually a
combination of solutions:
1 to 3 Energy from Waste,
Recycling Facilities,
Composting etc. and
sometimes collection
included
 Contract duration:
20-25 years
 3rd party tonnages
revenue
 Electricity and recyclates
revenue (+Gain Share
Mechanism)
Powerful asset to
leverage from
 Internalization of
municipal and commercial
tonnages to create value
 Mutualization of
sites / support in the
associated region
 Penalties to be paid if
diversion targets are
not achieved
91
Conclusion: UK revenue outlook
~3-4%
CAGR
€2.4bn
~3-4%
CAGR
€2.7bn
0.6
€2.4bn
€2.7bn
0.3
0.2
0.6
0.5
0.4
2.1
1.6
1.4
2015 est.
Municipal
2.2
2018 est.
Industrial
0.1
0.2
2015 est.
2018 est.
Commercial
92
Resourcing the World in North America
Terry Mah, President & CEO
History of Veolia in North America: Some key dates
1990’s
2000’s
1999
Acquisition of U.S. Filter –
expansion into water
treatment services &
equipment
1999
Acquisition of Superior
Waste Services –
expansion in solid waste
& industrial services
North
America
1999
Acquisition of portion of
Waste Management’s
hazardous waste &
industrial services
operations
2010
2015
2013
Rialto Water
Concession
2004
Divested majority of
historical U.S. Filter
assets
2004-2011
Indianapolis Water
system management
2015
Antero Resources
Shale gas water mgt
2011
Winnipeg, Manitoba
Peer Performance
Solutions
2011
New York City
PPS
2009-2010
Divestiture of Waste-toEnergy portfolio
2015
Key renewals in oil &
gas and
microelectronics
2012
Divestiture of U.S. Solid
Waste operations
2007
Acquisition of TNAI –
2010
2014
Acquisition of MATEP
Acquisition of Boston
(Harvard-affiliated
(Kendall Cogeneration)
hospitals) with partner
with partner
expansion in district
heating
2013-14
Fort St James and Merritt
Biomass projects
94
94
Key contracts and locations
Veolia North America
7,900 employees
Industrial
302 waste treatment
facilities and service
locations
14 permitted TSDFs,
incl. 2 haz waste
incinerators
200,000 tons of
hazardous waste
processed annually
106 industrial water
treatment installations
15.9 million gallons
of KOH processed
Municipal &
Commercial
164 treatment installations
for municipal/commercial
water and wastewater
serving 530 communities
 4.1 million water
customers
 5.8 million wastewater
customers
13 major energy districts
operated, with 9 major
O&M agreements
95
North America operations organized by customer focus
Customers
30,000 companies
and businesses
served
INDUSTRIAL
530 communities
served
MUNICIPAL &
COMMERCIAL
Organizational alignment
Integrated capabilities
Unrivaled network of best practices
Merging technology, operations,
engineering and consulting
96
Client & sector breakdown
2015 North America est. revenue: €1.8bn
Client breakdown
Sector breakdown
25%
31%
48%
52%
44%
Municipal & Commercial
Industrial
97
Proven Municipal & Commercial leader in North America

Energy efficient
buildings
Biogas-to-energy
production
Chilled water
production &
distribution
Combined heat
and power
(CHP)
Digester
plant






Household hazardous
waste (HHW) recovery
& disposal
Drinking
water
Wastewater
treatment
Steam & hot water
production &
distribution
Energy Management &
Advisory Services
Peer Performance Solutions
Commercial/Industrial Utility
O&M
Facility O&M
Maintenance Management
Services
Capital Program Management
Concessions
New York
Philadelphia
Boston
Tampa Bay Water
Montreal
Atlanta
New Orleans
Milwaukee
St. Louis
Houston (Galleria)
Los Angeles
Las Vegas Venetian
98
A preferred partner to all major industry sectors
Injection water
treatment
Raw water
production
Surface
cleaning
Downtime
management

Frac water
treatment
Water
output
treatment
Industrial water
supply
Land-based mgt of
drilling and
production waste
Soil
decontamination
Waste collection and
sorting, waste facility
management
Cooling feed
water
Wastewater
treatment
recycling
−
−
−
−
−
−
−
Compliance
management of
hazardous waste
Process
feed water
High pressure
& chemical
cleaning
Cleaning
storage tanks
Desludging
station
management
Hazardous and regulated
waste solutions
Boiler feed
water
Network
management
Special pumping
and network
cleaning

Water, cleaning and
maintenance solutions
−
−
−
−
−
−
−
Recycling and asset
management
Majority of Fortune 500 served: Intel, ConocoPhillips, UPS,
Antero Resources, Air Products, Toledo Refining Company,
American Electric Power
Recycling and recovery
services
Incineration
On-site services
Lab chemical services
Electronic recycling
Low-level radioactive waste
Fuel blending
−
−
Hands FreeTM technologies
Hydroblasting
Vacuum truck services
Chemical cleaning
Tank cleaning
Site-based services
Design-Build-OperateMaintenance solutions for
industrial water/wastewater
facilities
Oily residuals management
Byproduct and resource
recovery
99
99
Market trends and priority development areas in North America
INDUSTRIAL: Addressing increased demand for improving operational efficiency in a sustainable manner
 Strong demand for hazardous waste services and solutions,
driven by growth in the chemical, petrochemical, high tech and
pharma sectors
 Integrated water, waste and energy offerings increasingly
sought
 Lower oil prices affecting oil & gas sector, driving the need for
reduced costs; increased demand for water reutilization and
resource recovery technologies and services
Treatment of difficult pollutions – Hazardous Waste site
services and disposal
Leveraging site-based presence to cross-sell Veolia industrial
offerings in all market sectors
Oil & Gas sector – Deployment of industrial water and resource
recovery technologies and services
MUNICIPAL & COMMERCIAL: Addressing increasing needs for cost-efficient, sustainable infrastructure solutions
 Cities and campuses pursuing resilient and sustainable energy
infrastructure
 Smart buildings/campuses leveraging Big Data for efficiency
 Asset monetization and federal base agenda
 Emerging regulations that restrict waste disposal and promote
waste-to-energy opportunities
CHP-powered microgrids; performance contracts
Digital offers and SourceOne services in water and energy
Energy and water outsourcing, concessions and performance
contracting for cities, universities and military bases
Circular Economy – Commercial methanization of food waste
100
100
KOH recovery delivering significant results
 Centralized recycling, processing and
manufacturing facilities to provide
potassium hydroxide (KOH) regeneration
services to refiners with HF Alkylation
 KOH regeneration solution to
deliver savings, manage risks
 Example: Veolia designed, built, owns
and operates a KOH regeneration facility
under a long-term contract for a
manufacturer
 $20 million in annual savings
−
$14 million in KOH raw material costs
−
$6 million in waste disposal costs,
excluding disposal taxes
101
Gresham, Oregon



Veolia manages all operations and maintenance of
the city's 20MGD wastewater treatment plant,
biosolids program, industrial pretreatment,
cogeneration operation, laboratory services and lift
stations.
Facility now produces same amount of electricity as
it consumes, using biosolids from wastewater
treatment and fats, oils and grease, as well as solar
energy to produce power and reduce energy costs
Supporting energy independence
−
−
−
−

Increasing methane gas production by 15%
Achieving 20% reduction in energy usage
Reducing annual capital costs by 15% and Preventative
Maintenance time by 75%
Building a cogeneration plant, saving the city $1.6 million
for electricity
Collaboration between the municipality and local
industry
102
New York City –
world-class water, energy and waste services





NYC selected Veolia to support making NYCDEP
safest, most cost-effective and transparent U.S.
water utility via PPS model
10.8% total annual recurring financial benefit (more
than $100 million annually) as a percentage of 2011
budget
87 initiatives in water, wastewater, metering and
procurement demonstrating expertise in improving
and optimizing one of the world’s largest and bestmanaged utilities
Manage world’s largest Harmful Household Products
collection DSNY – 714,000 pounds in 10 events
including oil, batteries, pesticides, pharmaceuticals,
medical sharps, etc.
Premiere energy management services delivered to
iconic public and private buildings, campuses and
spaces
103
North America revenue outlook
Our breadth of solutions across sectors and service models is being leveraged to drive revenue growth in
both the Municipal & Commercial and Industrial business lines
6-7%
CAGR
6-7%
CAGR
€2.2bn
€1.8bn
€1.8bn
1.1
€2.2bn
0.6
0.4
0.9
0.9
0.8
0.9
1.1
0.6
2015 est.
Municipal & Commercial
2018 est.
2015 est.
0.7
2018 est.
Industrial
104
Growth
Capex allocation
Philippe Capron, Chief Financial
Officer
105
Strict investment criteria and process: A major transformation
lever
Strict investment criteria

BUs must submit to the Group Investment Committee/
Geographic investment Committee all projects above/
below €10m EV
−
In 2015 to date, 109 investment committees were
held:
−
−

Investment process
Referral to the investment Committee (Veolia or Geography)
Transmission of the application to Veolia’s support activities at
least two weeks before the investment Committee is held
Final version of the application is sent1 one week before the
committee is held
47 Group Investment Committees (43%)
62 Geographic Investment Committees
(57%)
Tightening of the decision process
Review of the project by the Financial, Legal, Technical &
Performance and Innovation & Markets Departments
Formalization of a notice by each department (possible joint
notice)
Depending on threshold
−
Group’s IRR ≥ WACC + 4%
−
ROCE ≥ WACC (end of 3rd year)
−
1
2
Pay-back < 7 years
General, technical, financial and legal notes, financial model and main contractual documents
Only in case of disagreement between Group’s support activities and geography Director
Group investment
Committee held
Geographic investment
Committee held
Arbitrage by the Deputy Director
in charge of operations2
Formalization and communication of the Committee decisions
in a statement of decision
106
AssetCo / OpCo business model (1/2)
AssetCo / OpCo Scheme: focus on long term O&M activities with limited capital employed
Veolia
Investor
Minority shareholder
Non-recourse debt
Majority shareholder
Service contract
AssetCo
Bank(s)
Customer(s)
Operating contract
Construction
contract
Engineering
Procurement
Construction (EPC)
Veolia optional
Operation &
Maintenance
Veolia
107
AssetCo / OpCo business model (2/2)
Example: A biomass power plant
On balance
AssetCo /
sheet scenario OpCo structure
A biomass power plant project

A 30-year project (rebased to a theoretical
€100m Capex)
Revenue
43.0
19.9
EBITDA
11.6
3.2
EBITDA margin
27%
16%
8.1
3.7
19%
19%
EBIT

Veolia’s financial commitment:

Minority ownership of the AssetCo
(19.5%); full ownership of the OpCo
EBIT margin
Net income Group share
Net income margin
5-year average post-tax ROCE
(excl. construction period)
Net Financial Debt
NPV at WACC



Equity injection: €5.6m
O&M EBITDA margin: 16%
This structure allows the transformation of
an 8% IRR into a 23% return1 for Veolia
1
IRR Veolia


Taking into account dividends from equity investment and cash flows from opco
4.2
2.3
10%
12%
5%
32%
100.0
5.6
18.0
16.8
7.9%
23.4%
Consolidation of AssetCo under the equity method
implies:

Substantial reduction in EBITDA and EBIT

Relative reduction in Net Income Group Share

Almost total reduction in Net Financial Debt

Significant increase of ROCE
Theoretically, based on this model, the reduction in
Net Financial Debt should allow for the development
of a significant number of similar projects with the
same investment envelope
108
2011-2015: A tightened capex discipline
Total capex
 2015 capex of ~€1.5bn
~9%
of revenue
~6%
€1.9bn
of revenue
~€1.5bn
 €1.2bn of maintenance and “committed”
growth capex (including contract renewals)
 €0.3bn of discretionary capex:
 New projects (greenfield or privatization),
e.g.:
− PFI program in the UK
− Heating network extensions in Central
Europe
− Growth developments in China
2011
2015
109
Continued capex discipline for 2016-2018: €1.6-1.7bn of annual
capex

Capex envelope increased from €1.5bn in 2015 to €1.6-1.7bn in the 20162018 period
 €1.2bn for maintenance and support of existing activities (contract renewals,
committed investments, etc.)
 €0.4-0.5bn of growth capex for new projects already included in the 2016-2018 Plan

This capex envelope supports targeted 2 to 3% average annual revenue growth
and is compatible with 5% average annual growth in EBITDA
 €1bn of net FCF expected in 2018
110
Potential for small and “mid-sized” acquisitions

Given the large number and lower risk of organic growth opportunities, M&A is not at the
heart of our strategy

We nevertheless have the possibility to complement our discretionary capex with
further growth opportunities by using the extra cash flow generated beyond 2015
 FCF of €1bn in 2018
 Asset divestiture reservoir

Larger acquisitions are not ruled out in specific situations
 Growth in strategic geographies/industries combined with significant synergies
 Entry in new promising areas especially if associated with the acquisition of proprietary
technologies
 Would be part of an asset arbitrage strategy in order to preserve our balance sheet
111
Financial objectives
Veolia’s financial
equation and
restored financial
flexibility
Philippe Capron, Chief Financial
Officer
112
Veolia’s past performance
Revenue (€bn)
EBITDA (€bn)
+ c. 8%
+ c.20%
24.4
23.2
Current net income (€m)
c. x9
~ 25
22.8
~3.0
> 550
2.8 2.6 314
2.6 223
59
2012
2013
2014
2015 est.
2012
2013
2014
2015 est.
1
2012
1
2013
2014
2015 est.
Note: Post IFRS 10-11 Figures - Unaudited financials, 2015 as per Veolia’s estimates (not reviewed by company auditors)
1
Adjusted net income
113
Revenue > €27bn in 2018
Key drivers
Revenue growth
 Tariff indexation (even in a lower
inflation environment)
CAGR1
>€27bn
+2.0 – 3.0%
 Organic growth:
 Municipal:
~ €25bn
− Innovative solutions for cities in developed
countries:
•
Peer Performance Solutions
•
Circular economy projects
− Continued development of our historical
activities in emerging countries, within
compliant contractual framework
 Industrial: seize the best opportunities in
the industrial utilities outsourcing fast
growing market: oil & gas, mining & metals,
food, beverage & pharma, difficult pollutants
2015 est.
1
Excluding volatility related to Global Businesses
2018 est.
114
Revenue growth by geography
+2.0 – 3.0% CAGR
> €27bn
~ €25bn
2015
est.
France
Rest of
Europe
Rest of
Global
the World Businesses
2018
est.
Comments

−
−

Rest of Europe: solid growth
−
Strong growth expected in the UK, fueled by PFI contract and commercial development (incineration, biogas..)
−
Central & Eastern Europe: resilient existing municipal business & business development in major cities (water & heating
network, Industrial utilities & energy efficiency projects)

−
−
−
−

France: Flat
Low inflation environment
Commercial development compensates impact from contract renewals
Rest of the World: strong growth in all geographies in particular North America and Asia
Industrial Water
Industrial Utilities & Energy efficiency projects
Hazardous waste and Soil Remediation
Circular Economy – Water Reuse and Zero Liquid Discharge
Global Businesses: Volatility in D&B business offset by continued strength in Hazardous Waste
115
€m
2016
2017
2018
Gross savings
200
200
200
60
30
10
116
EBITDA of ~€3.5bn in 2018
EBITDA growth
CAGR
~€3.0bn
~€3.5bn
~ 5%
2015 est.
2018 est.
Key drivers

Top Line Growth: 2-3%, ie. ~+€2bn by 2018

Cost-cutting: At least €600m by 2018

Commercial headwinds, price pressure estimated at €100m per year
117
Current EBIT of ~€1.7bn in 2018
Key drivers

EBITDA growth

D&A slightly up over time

Strong growth of JV net income
Current EBIT growth
CAGR
~€1.7bn
~10%
~€1.3bn
Net income from JV & Associates
€m
2014 Proforma
France
(1)
Europe excluding France
20
Rest of the World (mainly China)
34
World businesses
12
Others
Total
4
69
2015 est.
2018 est.
118
Debt profile
 Strong liquidity and debt profile underpin our commitment to maintain solid credit rating
1,000
Liquidity
900
(as of 30 June 2015)
800

Group net liquidity
at €5.8bn

Including €4.1bn in
undrawn confirmed
credit line1
700
600
500
400
Maturity
300

200
Average maturity of net
financial debt: 8.2 years
at June 30, 2015
Rating
100
2015 Amortisation
EUR
GBP
USD
CNY
2038
2037
2036
2035
2034
2033
2032
2031
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
0

S&P: A-2 / BBB

Moody’s: P-2 / Baa1
Eurobond buy‐backs 9‐Apr‐15
119
Gradual decrease in cost of financing
521
Key drivers
482
~440

Gross debt reduction
despite increased
maturity

Rationalization of
subsidiary financing and
cash management

Active asset/liability
management
 Further reduction in
cost of financing
2013
2014
2015
2018
est.
est.
120
Current net income > €800m in 2018
Key drivers

Current EBIT growth

Decrease in cost of financing

Tax rate stabilized below 30% thanks to
organizational and geographical rationalization
and improved profitability
Current net income1 growth
CAGR
~10 – 15%
> 550
2015 est.
1
> 800
2018 est.
Group share
121
Net free cash flow before dividends: €1bn in 2018
Key drivers

EBITDA growth

Capex control: €1.6bn to €1.7bn per year for
2016-2018

Decrease in cost of financing

Lower tax rate

Continued WCR discipline

Additional free cash flow will be used to boost
growth through discretionary capex or
acquisitions, as well as to increase dividend
Net free cash flow1 growth
~ €1bn
> €500m
2015 est.
1
2018 est.
Before dividends and discretionary capex, assuming constant net debt
122
Target post-tax ROCE of c.8-9% in 2018
Post-tax ROCE1
Key drivers

Operating efficiency

Current EBIT growth

Stable capital employed1

Focus on capital efficiency and capex-light
model

Lower tax rate
~ 8-9%
6.5%
Average Capital Employed by segment1
€m
2015 est.
France
2.0
Rest of Europe
7.7
Rest of the World
4.0
World businesses
1.1
JV & associates & Other
1.7
Total
1
16.51
2015 est.
2018 est.
Including operating financial assets and including JV and associates
123


1
2015 estimates
2018 targets
Revenue
~ €25bn
> €27bn
EBITDA
~ €3bn
~ €3.5bn
> €550m
> €800m
Free Cash Flow1
> €500m
~ €1bn
124
Restored dividend growth starting in FY2015
 Dividend increase in 2015 to €0.731 per share in cash signaling the Board’s
confidence in the future
 From 2016 to 2018, we expect to be able to provide around 10% annual dividend
growth to our shareholders, while reducing our payout ratio
~ +10% p.a.
1
1
Payable in 2016, to be proposed for approval at the company’s annual shareholder meeting
125
Conclusion –
wrap up
Antoine Frérot, Chairman and
126


1
2015 estimates
2018 targets
Revenue
~ €25bn
> €27bn
EBITDA
~ €3bn
~ €3.5bn
> €550m
> €800m
Free Cash Flow1
> €500m
~ €1bn
127
Q&A session
128
Appendix
129
Agenda
1.
Key macro sensitivities
2.
Water in France
3.
Waste in France
4.
Veolia in Northern Europe (Germany, BELUX, Netherlands, Nordics)
5.
Veolia in Central & Eastern Europe
6.
Veolia in Southern Europe (Italy, Spain)
7.
Veolia in Australia & New Zealand
8.
Veolia in Africa & Middle East
9.
Global Businesses
3
Key Macro Sensitivities
Key macro sensitivities
FX
Oil

Average +/-5% of key currencies vs. € => +/-€450m revenue & +/-€65m EBITDA

+/-10% gasoline prices (for the Waste collection) => +/-€30m EBITDA
(short term impact )

+/-10% recycled paper prices => +/-€38m revenue & +/-€6m EBITDA

+/-10% scrap metals prices => +/-€16m revenue & +/-€4m EBITDA

+1% inflation on wages => -€75m EBITDA

+/-100 HDD1 in Central & Eastern Europe => +/-€22m revenue & +/-€10m EBITDA
(during the winter season)

+/- 1% volumes in French Water => +/-€15m revenue & +/-€10m EBITDA
Commodities
Inflation
Weather
1
Heating Degree Days
132
Water in France
Water in France
Key figures
Key Indicators
1. Drinking water
2015 est. Revenue: €2.9bn
•
Number of PSD contracts: 1,940
•
Number of clients: 7.2 million
•
Volumes sold: 1,269 million m3
•
Linear of network: 204.4 Mml
•
Treatment plants: 745
•
Smart meters: 1.67million
2. Wastewater
Average duration of remaining
contracts at 2015-end: 7 years
•
Number of PSD contracts: 1,714
•
Number of users: 4.2 million
•
Volumes sold: 699 million m3
•
Linear of network: 73.7 Mml
•
Wastewater treatment plants: 2,511
134
Water France
Key market trends
11%
Mature market:

Drinking
Water

Regions
34%
20%
Veolia

Suez
Saur
Others

35%
Wastewater
treatment
9%
20%
The PSD model is more constrained
(duration – Olivet decision, security,
transparence, Brottes law…)

Strong regulatory changes
underway
Veolia
Suez
Saur
22%

Regions
48%
Delegation market stagnating following a
period characterized by numerous
contract renegotiations and/or a significant
reduction in price
Decline/ stagnation of volumes (roughly
-1% per year); weak inflation
End of a period of major facility
investments
Others
135
Water France
Veolia Offer and Differentiating Factors

Leasing contracts with a social component (ex: Lille) – differentiation through
Veolia’s ability to provide innovative services

Smart Water Box: worldwide partnership with IBM, industrialized offer
(reinforcement of network and plant performance, and of the security related to
water quality; address the clients’ need for transparency)

Specialty companies: new high value added services for regions; protection of
our cutting edge know-how

“Social business” incubators
136
Water France
2011-2015 Transformation plan
Transformation of the company to regain
competitiveness and efficiency, and end the decline in
margins
•
Continuing cost reduction actions initiated in prior
years (Hellébore)
•
Restructuring plan aimed at:
•

Improved efficiency through increased
responsiveness and Regional Center autonomy while
achieving structural savings: 4 Zones (vs. 7 regions
previously), 21 Regional Centers (vs. 32 previously),
simplified decision making

Downsizing employee numbers, via internal mobility
and a voluntary departure plan

Developing specialty companies to preserve knowhow, developing new markets and supplementing
through a specific approach, productivity gains from
the reorganization plan
French Water FTE
-11%
Modernization of information systems and
reformation of the performance analysis system

Analytical management by contract

Securing systems and lower costs
137
Water France
2016-2018 strategy & prospects

Continue Efficiency and Productivity gains
− IT, Purchasing, Energy…

Re-develop the business around new services
− Industrialization of offers
− New services: customer services etc.
 Gradual improvement in EBITDA thanks to:
− Development of new services via specialized companies
− Commercial development compensates impact from contract renewals
− Continued productivity gains and purchasing savings
138
Recycling and Waste Recovery in
France
Municipal: key market trends
 Mature market
 Volume trends:
− Confirmed trend in tonnages decline, including landfill, due to economic
slowdown
− Energy transition law: tonnages sent to landfill must be reduced by 30% by
2020 and by 50% by 2025
 Sharp drop in metals and plastic prices
 Energy transition law also creates opportunities:
− generalized mandatory biowaste collection by 2025
− mandatory “5 stream” collection (paper, plastics, wood, metals, glass) for
both public and private sector,
− 70% waste recycling & recovery target for construction sector
− Legal framework for refuse derived fuel development
140
A zone under transformation
Industry trends render business model shift mandatory

Ambition: to become the reference producer of recycled raw materials and
green energy in France
Transformation plan initiated 14 months ago:
 Zone
organization aligned following a complete overhaul, to be more agile
 Target
cost savings of 5% of costs by end of 2015: in line with the Group’s
cost savings plan
 Development
objective: New offerings (recycled raw materials, green
energy, innovative services) between now and 2017
141
Veolia Differentiating Factors & Growth Drivers
Key differentiating factors
• Strong research programs in recycling and
green energy
Key drivers
• Shift from waste services provider to industry
leader transforming waste into recycled raw
materials and green energy
• New modes of RDF recovery
• Energy transition law
• Biowaste comprehensive offer
• Refuse derived fuel
• Dismantling units
• Innovative collection systems, reverse logistics,
diffuse flow management, incentive pricing
(based on weight)
• Positioning in the circular economy:
developing recycling and processing of
recycled raw material
• Innovative Solutions
• New model of Household Waste Recycling
Centres: value added Recycl’Inn facilities
• Strong territorial presence
142
Revenue by activity and installations
Revenue by activity
% Revenue
Municipal Collection
22%
Commercial & Industrial Collection
21%
Transfer - Sorting - Recycling - Trading - Compost
35%
WTE (Energy recovery facilities)
13%
Landfill
10%
Facilities:

154 sorting & recycling centers

58 biological treatment platforms

45 energy recovery facilities

37 landfills
Electricity production of our facilities:
equivalent to the consumption of the Toulouse agglomeration
Heat production from our facilities:
equivalent to the consumption of the city of Lyon
143
Our clients
Commercial &
Industrial: 53%
60,000 companies
Industries 33%
Tertiary 20%
Industrial client split
Municipal clients: 47%
4,000 municipalities serving
more than 16 million
inhabitants
Tertiary client split
Mines/ Metals/ Steel
22%
29%
2%
3%
4%
14%
Pulp & Paper
25%
Energy
Food & Beverage
Oil & Gas
26%
22%
Pharma & Cosmetics
Other
Wholesales & Retailers
Constrcution
Eco-organisms
9%
Buildings & Offices
21%
11%
12%
Health
Others
144
Contribution of the Zone to the Group’s strategic growth
platforms – Dismantling of ships
Markets
Oil & Gas
Mining
Transversal Themes
Food &
Beverage
Complete management of the entire value
chain:
• logistics
• dismantling
• asbestos removal
• materials recovery
• treatment of residual waste
Dismantling
Circular
Economy
Innovative
solutions
for Cities
Difficult
pollutants
Example
• Client: Marine Nationale
• Ships: the Jeanne d’Arc and the Colbert
• Contract: €11.5 million
• Duration: 32 months
• Recovery rate: greater than 90%
145
Contribution of the Zone to the Group’s strategic growth
platforms– Dismantling of RER train cars
146
Innovative solutions for cities
Collection
Example: pneumatic collection
• Household waste is transported via an underground network,
from fixed collection points to a compaction unit
• Lower emissions due to less dump truck traffic
• Eliminates the nuisance related to storage and
removal of waste bins
• Potential in France limited to new urban developments, but
strong potential elsewhere in the world
Example: Waste truck powered by compressed air
• Prototype is pending approval in order to facilitate more
environmentally friendly collection
147
147
Recycled raw materials innovation: auto-adaptive sequential
sorting and remotely operating sorting (Amiens)
Two challenges:
• To improve sorting of plastics, one of the most complex
product families to sort
• To improve working conditions by limiting contact between
the operator and waste
Results:
• Sorting is 2.5x faster and better (+6% increase in sorted
plastics)
• Reprogrammable to include new plastics
• Development of a touch screen to sort packaging waste
without touching it
• Investment: €2.5m
148
148
Remotely operated waste sorting center in Amiens
Process overview
149
Green Energy Innovation: Improved energy recovery at a landfill
site (Lapouyade, Gironde)
Three challenges:
• Recovery of waste heat to be utilized by 8 biogas motors
(transforming waste into energy - 8MW)
• Development of economic activity in rural areas
• Acceptance of the landfill site by local residents
Partnership between Veolia and farmers: water that is used to cool
motors flows through an underground network to heat greenhouses
where tomatoes are grown.
150
150
Veolia in Northern Europe
countries
Veolia’s presence
Key figures
2015 est. revenue:
€2.2bn
7%
53%
40%
Municipal
45%
Industrial
55%
152
Northern Europe Market trends
 Large market
−
130m Inhabitants / 85% € zone
 Strong and respected policy and regulation
−
…at the forefront of EC requirements (CO2, efficiency, recycling..)
 Market under pressure with strong competition and declining
commodity prices
 Industrial platforms & energy assets for sale
 Local District Heating Network development
 Strong player in Germany, Belgium & Sweden - Becoming visible in
the Netherlands & Finland
153
Strategy
TBU
Veolia key differentiating factors
 Strong portfolio of key industrial clients
 Large Territorial presence, combination of Water, Waste & Energy businesses,
Technical expertise and advisory capabilities
 Current business reinforcement
− Geographical optimization
− Vertical integration
 Evolution of Business model towards more value added
− Utility supply (local DHNs, local CHP and cogeneration units)
−
Plant operation with Efficiency value sharing (ecosolutions and Hubgrade)
 New Business development
− Circular Economy with added value (AKG, Rödental waste enhancement)
−
Electricity flexibility
154
Veolia in Germany
Veolia in Germany
Over
200 sites
Headquarters in Berlin
More than 10,000 employees
€1.7 billion in
Water
revenue
Waste
Energy
156
Veolia with three business lines in Germany
WATER
o
o
o
Drinking water supply for
more than 905,000 people
Wastewater treatment for
795,000 people
Partner of more than 230
municipalities
WASTE
o
More than 110,000
customers from industry,
commerce and trade
ENERGY
o
o
o
Local partner for more than
12 million people
o
o
Employees:
c. 700
Employees:
c. 9,350
Municipal partner in energy
supply
340,000 electricity and gas
customers
Public lighting contracts
Investments in public
utilities
Employees:
c. 1,300
157
Business Water Management
Specialists for water supply and wastewater disposal
• Water supply (drinking water, service water,
ultrapure water and process water)
• Wastewater treatment, -recycling
• Planning, construction, operation, maintenance of
water/ wastewater treatment plants
• Technical water and wastewater concepts and
studies
• Water2Energy – increasing energy efficiency of
waste water treatment systems
• Water2Value – analysis of water cycles and
creation of recycling concepts
• Transport and utilization of sewage sludge by precovery
• Kanal+ – services around canalisation and asset
management
• Innovative water meter management
• Operation of swimming pools
• Laboratory work and legionella control
158
Business Water Management
Specialists for water supply and wastewater disposal
• Partnership with >300 municipalities
• C. 700 employees
• C. €72m turnover
• Drinking water supply for c. 1.3 m people
• Sewage water disposal for c. 1.7 m people
• Operators of 8 municipal swimming pools
159
Business Waste Management
Experts in waste management and recycling
• Nationwide waste management
• Complete waste management for all waste
fractions
• Modern recycling technologies
• Marketing of recyclable materials
• Production of alternative energy sources
• Industrial services
• Infrastructural building services
• Technical services
• Pipe and sewer cleaning
160
Business Waste Management
Experts in waste management and recycling
• Turnover €870m
• C. 9,350 employees
• > 165 locations and > 60 treatment and
sorting plants
• > 2,400 vehicles
• Marketing of 2,1m tons of waste paper
• Treatment of > 2m tons of waste for
disposal and sorting residues
• > 110,000 business, commerce & industry
clients
• Municipal services for > 12m people
161
Business Energy Management
Innovative solutions for energy efficiency
• Energy efficiency management
• Local and district heating networks,
cooling networks
• Decentralized energy supply
• Renewable energies
• Technology/engineering for CO2
reduction
• Partnership with local communities in the
set-up and operation of public utilities
• Energy and fuel strategies
• Technical-energetic plant optimization
and technical building management
• Energy supply
• E-mobility
162
Business Energy Management
Innovative solutions for energy efficiency
• C. 1,300 employees • C. €700m turnover
• Majority shareholder of 3 municipal utilities (energy supply for 320,000 people)
• 5 municipal utilities in the process of rebuilding (energy supply for 160,000 people)
• 9 public lighting contracts for 67,000 light points
163
Mid-term ambition
o
2016
Focus in 2016 is on positioning Veolia on the Waste re-composition
market which is an accelerating process and the strengthening of our
multi-business growth platform VIS
2017
o
2018
o
Focus in 2017 is the organic growth of the Water & Energy business
targeting adequate projects in selected areas
Focus in 2018 is the consistent approach regarding the Stadtwerke
model and a reactive behavior on the moving German market
164
Veolia in BELUX
BELUX experience
(€229m - 1,770 employees)
ENERGY






12 offices all over Belgium and Luxemburg
30 000 installations maintained
9 000 buildings managed
18 CHP under operation
3.4 million m² managed
Heating & cooling network expertise
WASTE
 1 Municipal 33,000 t/y incineration plant
WATER
Water
Waste management
Energy
 Construction, operation and financing of the largest WWTP in Belgium (Brussels‐North)
 Comprehensive operation of industrial wastewater treatment plant of one of the largest dairy plants in Europe
 Operation support for industries
166
BELUX experience
WATER
NETWORK
MANAGEMENT
PRODUCTION
SERVICES
ENERGY
WASTE
No
Small DHN in development
No
Brussels North WWTP
Decentralised steam, CHP, Biomas plant
Hazardous and liquid waste treatment (SARPI)
Composting (SEDE)
Industry: consulting
(Seureca), O&M, after‐sales
services (VWT)
Commercial: Building related
water services
Strong portfolio Building Energy Services
WWTP Sludge & Organics for
municipalities & industries (SEDE)
Experience
Experience
Experience
167
Veolia in the Netherlands
Veolia in the Netherlands
(€90m - 350 employees)
Biomass DHN
Industrial parks
Industrial Utility
Industrial Rest Heat DHN
Industrial WWTP
169
The Netherlands experience
(€90m - 350 employees)
WATER
ENERGY
WASTE
No
3rd player in NL following
acquisition of Ennaturlik in 2014 No
PRODUCTION
Few industrial WWTP O&M
Decentralised steam, CHP, Biomas plant for industry & municipalities
No
SERVICES
After sales services (VWT)
Industry and building related
water services
Consistant portfolio Building Energy Services
No
Experience
Experience
Experience
NETWORK
MANAGEMENT
170
Veolia in the Nordics
Veolia in the Nordic Countries
Some of our clients
Veolia in the Nordic Countries
•
Turnover: €240m
•
1,180 employees
•
Above 70 locations in the Nordics
Mining & Metal
Food & Beverage
Public clients
Manufacturing Industries
172
Nordics experience
WATER
NETWORK
MANAGEMENT
ENERGY
WASTE
Small municipal contract
O&M for Boras District Heating Networks
No PRODUCTION
Small municipal contract
Decentralised steam, CHP, Biomas plant for industry & municipalities
No
SERVICES
After sales services (VWT)
Industry and building related
water services
consistant portfolio Building Energy Services
No
Experience
Experience
Experience
173
Veolia in Central & Eastern
Europe
KEY FIGURES
Key figures
WATER
Total for Central & Eastern
Europe Zone:
People served: 11,470,000
Employees: c.14,000
Revenue: €1.0bn
Employees: 25,000
2015 estimated revenue: €2.9bn
Total revenue
ENERGY
Employees: c.11,000
Revenue: €1.9bn
175
2015 revenue
Water, Energy
Revenue by country
Lithuania2Armenia1
Russia2 €240m
€20m
€10m
Bulgaria
€90m
Revenue by business
Czech Republic
€1,020m
Romania
€300m
€1.0bn
€1.9bn
Poland
€860m
1
2
Water only |
Energy only |
Slovakia €200m
Hungary
€150m
176
Success in the Central Europe water market
A history of more than 20 years to achieve current revenue of
~ €1bn based on customized long-term partnerships
1994
1996
1999
2000
2001
2002
2006
2006
2010
Szeged,
Hungary
Pilsen,
Czech Rep.
North
Bohemia,
Czech Rep.
Bucharest,
Ploiesti
Romania
Prague,
Czech Rep.
Tarnowskie
Gory,
Poland
Yerevan
Armenia
Banska
Bystrica,
Poprad,
Slovakia
Sofia,
Bulgaria
Customized strategy
and business model
by country
Czech Republic and
Slovakia:
Lease Contract
Bulgaria, Hungary,
Romania:
Concession
177
Success in the Central Europe energy market
A history of more than 20 years to achieve the current
revenue of ~ €2bn based on customized long-term
partnerships
1991
2000
2000
2002
2002
2005
2007
2008
2012
Hotel
Prague
Hilton,
Czech Rep.
Ploiesti,
Romania
Bratislava
Petržalka,
Slovakia
Vilnius,
Lithuania
Poznan,
Poland
Łódź,
Poland
Varna,
Bulgaria
Žiar nad
Hronom,
Slovakia
Warsaw,
Poland
Customized
strategy and
business model
by country
Czech Republic and
Slovakia:
Mixed Lease Contract
and Ownership of
assets
Bulgaria, Lithuania,
Romania:
Concession
Poland:
Ownership of
assets
178
Key market trends
 Market remains supported by infrastructure improvement and modernization needs and
the opportunity to connect new areas to heating networks managed by Veolia
 Favorable regulatory context related to the application of European Environmental
directives (upgrades) and European Energy directives (efficiency, renewables)
 Water/ Energy Markets impacted by:
 Tariff and margin pressure related to changes in regulatory mechanisms, uncertainties
regarding incentive policies for renewable energy production and obligatory
costs/investments related to required upgrades
 Development obstacles: lower duration contracts in the EU, unstable geopolitical
situation in certain Central European countries
179
Main development focus (1/2)
 Improve profitability of our current position
‒ Maintain/improve the profitability of heating network platforms
• Connection of new customers/new city areas
• Investments in certain production facilities to optimize their energy mix
‒ Adapt existing contracts to the digital world and/or to new regulations
• Integration of digital or complementary services in some contracts
• Ensuring compliance with environmental regulations (wastewater treatment, pollution treatment) and
energy regulations (harmful emissions) at facilities
‒ Renewal of expiring contracts
• Preparation for the renewal of contacts which expire in the next five years
 New opportunities in the conventional Water and Energy markets
‒ Targeted developments regarding medium sized cities, particularly where our presence can lead to
significant improvement in service performance
180
Main development focus (2/2)
 Enter the “waste-to-energy” market
‒ Via incineration projects with energy recovery in a PPP framework (BOT or DBFO)…
‒ … in which Veolia would serve as the operator
• Projects in partnership with investors, with Veolia as a minority investor if necessary
• Projects co-financed by European subsidies
 Enhanced range of offers
‒ Develop a new range of services:
• Offering to improve water services management/energy management (improved network efficiency,
maintenance planning optimization, energy efficiency “Hubgrade”)
• Energy recovery offering related to wastewater sludge/waste
• Customer service management (global front office and back office offer)
 Become a leading player in the building energy efficiency market
‒ Enhance the Group’s range of offers for buildings with energy efficiency
‒ Contribute to the establishment of benchmark contractual models in Energy Performance in each
country with “Building Hubgrade” at the core
‒ Develop activities in this market by targeting in order of priority (1) collective housing, (2) hospitals and
(3) offices and shopping centers
181
Veolia offer and differentiating factors
 Delegated management /concession/DBFO projects: Differentiation by our ability to further develop our expertise, build
partnerships and manage complex projects
 Common levers between Water and Energy business lines
‒ Organisation optimization
‒ Operational performance and construction optimization
‒ Optimization of the accounting, invoicing and cash flows
‒ Contract amendments to fulfill customer needs and existing regulations
‒ Optimization of tariff negotiations
‒ National incentive policies (environment, energy efficiency, renewable energy…)
 Levers specific to Energy
‒ Optimization of energy mix
• Optimization of fuel purchases to better protect from price volatility
• Optimization of choice of production sources or investment in alternative production sources in order to create value
‒ Managing connections to/disconnections from heating networks
• Avoid disconnections (competitiveness vs alternative heat, particularly individual systems)
• Connections of new systems/new houses to heating network
‒ Ancillary revenue
• optimization of the production and sale of electricity in the case of cogeneration
• Ancillary services (Network support)
182
Organic growth drivers and targets
Key drivers
Revenue growth
~3% CAGR
1. Success in large cities

Energy : heating networks

Water – ex: water and wastewater treatment
services
€3.2bn
€2.9bn
2. Reinforcement of presence by new medium size
contracts

Heating networks

Water or heating network concessions
3. Development of new services

Ex: Energy recovery from waste/sludge
2015 est
2018 est
183
Prague water and wastewater (1/2)
Population served: 1.4m inhabitants.
Signature: 2001
Duration: 27 years
Specificities: The agreement includes about a hundred commitments of the Operator pertaining to (1) tariff and economic performance, (2) water quality and services’ quality, (3) infrastructure repair and maintenance works, (4) Customer service (5) training of and guaranteed social conditions for staff
Investments:
The Operator pays every year to the City the rent it sets to finance all the investments it has determined
Turnover 2014: CZK5.86bn (c. €200m)
184
Prague: water and wastewater (2/2)
Employees
Performance
2500
2000
1,929
Key results
1500
955
1000
500
Improvement of the efficiency of the drinking water network: 65% in 2001 to 82.7% in 2014
0
2001
2014
Network performance
100%
80%
Progressive staff reduction without layoffs: 1,929 in 2001 to 955 in 2014 (divided by 2)
82,7%
Installation of SCADA (Supervisory Control and Data Acquisition), centralised remote management and GIS (Geographic Information System) on the facilities
optimization of the sludge treatment at the wastewater treatment plant (anaerobic digestion) to significantly increase the production of biogas. Biogas to energy recovery produces through cogeneration 83% of the energy needed for daily operation of the plant.
65%
60%
Cost optimization allowing to increase the rent paid to the City (to finance investments) faster than the tariff
40%
Prague is a digital showcase of Veolia’s know‐how in water operation in the country: SWiM (smart networks), numerous applications for the end‐users 20%
0%
2001
2014
185
Veolia in Southern Europe
Veolia in Italy
Veolia SIRAM
in Italy
Italy
Group
Est. 2015
Revenues
700M EUR
•
3,400
Employees
HQ Milan
4 Business Units:
North West, North East,
Centre North, Centre South
(Holding and SSC)
•
HQ Rome
•
23
Subsidiaries
91
Offices
Over 3,000
Customers
HQ Rome
188
Key strengths and objectives
Strengths
Challenges
‐ Transforming
- Strong presence in a
restructuring market
- Italian leader in energy
services and efficiency to civil
buildings for Public
Administration, Tertiary and
Residential sector
- Leading position in Health
sector
- New team on board
- A well-known brand
Maintain and Capitalize
the company after
recent difficulties
- Improving profitability through
commercial development and
operational performance
- Complex market with many
opportunities
- Maintaining leadership in a
price-driven Public market, but
strategic for the Company
- Developing new offers for
industrial, tertiary and
residential customers
Develop
189
Veolia in Spain
Veolia in Spain
Santander
A Coruña
Revenues
2014
€259m
Bilbao
Oviedo
Vitoria
Vigo
San Sebastián
Pamplona
Afpurna
Logroño
Burgos
Girona
Barcelona
Zaragoza
Madrid
2,317
Employees
Castellón
Valencia/Alicante
Enerbosque (Extremadura)
32
Companies
Sevilla
Veolia Solar (Onteniente)
North Area
Catalan Area
Málaga/Murcia
Center‐South Area
Specialised subsidiaries
Over 3,000
Customers
Canarias
191
Veolia in Spain
Key strenghts and objectives
Challenges
Strengths
- Improving profitability through
- Geographical presence in the market
- Continuous commercial
development in a depressed economy
- Leadership in Energy Efficiency in
Spain
- Strong operational team and tools
- Controlled SG&A
Maintain and Capitalize


Energy Efficiency long term contracts
Integrated and streamlined organization
- Portfolio renewal with margin
improvement
- Commercial development of
Barcelona district system
- Specific focus on industrial market
- Build Waste and Water offers
Profitability enhancement
192
Ecoenergies Barcelona: District Heating and Cooling
The challenge
A project in Barcelona: collaboration with the Barcelona City Council,
L'Hospitalet city council and other entities in the metropolitan area.
A project that allows the buildings south of Barcelona, the Zona Franca
and Hospitalet, to have heating, air conditioning and hot water with
economic and efficient environmental solution
Veolia’s solution
A project awarded in 2009 whose main commitment is the preservation
of environment, substantial improvement in efficiency energy and
significant reduction of CO2 emissions, NOx and PM10
• Utilization of plant residue, originating in the maintenance of parks and
gardens in Barcelona with a complement of forest biomass
• Using residual cold process regasification plant in the Port of Barcelona
(up to 30 MW)
The benefits for our client
CONTRACT SCOPE
Site: City of Barcelona
Scope: District heating and cooling
Duration: 30 years concession
• Environmental impact: preservation of the environment, integration of
facilities to the urban environment, and reducing CO2 emissions.
• Comfort and ease of use, heat supply continuity. A comfortable and
friendly environment
• Competitive cost: minimum investment and economical maintenance,
competitive thermal energy with guaranteed technical solvency.
• Others like safe source of energy, quality of service, more secure
environment, etc.
193
MATARO (Barcelona): Waste treatment facility
The challenge
A joint-venture was set-up for Maresme Region household waste
treatment including revamping of the incineration facility, construction of
a pre-treatment, composting and gasification facilities with an operating
contract from 01/01/2010 to 31/12/2024 . The facility is treating waste of
30 municipalities from the Area
Veolia participates by 47% with another major shareholder
Veolia’s solution
« BOT » Contract MBT: 190.000 t/y Revamping of existing WtE plant:
141.382 t/y at 2.759 kcal/kg Bulky waste treatment: 6.000 t/y (including
internal waste) Waste collection transfers: 49.000 t/y
- Improvements in the combustion control system
- Improvements in the boilers
- Improvements in the depuration system:
- Improvements in the emission control system
CONTRACT SCOPE
Site:
City of Mataró ( Barcelona)
Scope: Waste treatment including revamping of the incineration facility
Duration: 15 years
418,000 residents served
•
•
•
•
•
Reduction in weight and volume (95%) residues
High availability and reliability
Energy recovery from waste
Decreased need for landfills
Valuation of slag and ash
194
VITORIA City: Building Energy services
The challenge
Vitoria City Hall is a Veolia historical customer. It has been the first city
hall to believe in and to sign an energy efficiency contract which is still
today a reference at national level
Veolia’s solution
The maintenance of 323 buildings is forwarded
Total guarantee and financing of the investment made for the heatingsanitary water and air-conditioning installations
Giroa is in charge of the energy management with a fixed P1 deadline
defined for each building
Others
CONTRACT SCOPE
Site:
City of Vitoria
Scope: Energy management
Duration: First signed on June, 29th, 1999. Renewed on September,
• Active participation in the Green Capital project (electric vehicles,
biomass reference,…)
• Participation in the Lepazar XXI project: 25-year PPP for the municipal
services headquarters
• Substitution of 6 boilers in biomass boilers
• Common project for biomass activity
14th, 2009
195
Veolia in Latin America
Latin America: Business overview
Veolia’s presence
Key figures
Mexico
Colombia
Venezuela
Ecuador
2015 est. total revenue: €650m
Peru
Chile
Argentina
Waste
Industrial waste
Water

80+ contracts

10,500 employees

70+ subsidiaries
197
Key Strengths and challenges
Strengths
‐ Present in 7 countries which mitigates risk
- Proven experience in all kinds of contracts in
Waste and Water
- Powerful “LATAM” local and corp. teams
- A unique organizational chart
- Powerful local partners
- A well-known and appreciated brand for
municipal market
- Controlled SG&A costs
Maintain and Capitalize on the Advantages
Challenges
-«Poor» technologies to strengthen & prices level
sometimes very low (prices of waste in Mexico,
water in Ecuador...)
- A continent divided in 2 blocs (investment grade
versus Bolivarian axis)
-
A zone still dependent on raw materials
-
- A very competitive market
- Strict legislation, not always respected
Tackle Weaknesses
198198
Strategy by Activity
CORE BUSINESS

Water
Waste





Energia
Energy
Integral concessions
O&M
Service contracts
Modern landfill
Waste collection in major cities
Waste valorization NEW MARKETS
NEW BUSINESS




Consulting /PPS
BOTs, DBO, BOO
Industrial landfills Alternatives to landfill (MBT Plants, W2E)

Industrial sector
‐
‐
‐
‐
O&G
Mining
F&B
Paper
Energy Efficiency
(generation of electricity, biomethane)
Priorities so far
Firsts contracts signed in 2015
199
The main industrial businesses are integrated
Industrial waste
Energy
Oily Sludge
Spain Energy
Refap
Mataró W2E Plant
Arcelor
Multiservice contract
Barahona
Copper recycling
Argentina
Energy
2014 Implementation has been completed
2015 End of July Portugal & Spain May 2014 Mataró W2E Plant to be implemented Argentina
Barahona
200
Municipal long term plan: key market trends
 Moderate growth: heterogeneous market growing at a small pace in 2014
and 2015, in particular due to the situation in Brazil (Petrobras scandal) and
to the falling oil prices which impact local economies
 Strong urbanization: about ~290 cities with over 200K inhabitants
(including 125 in Brazil) and an urbanization rate of c.75% (the highest in
emerging countries)
 Traditional market with a very low access rate to the service and an
evolving regulatory environment, though weakly enforced
201
Organic growth & Targets
Key drivers

TBU
Revenue growth
Reinforce our core activities

Water: Concessions / BOT in Mexico, Colombia,
Peru

Waste in Mexico, Colombia, Peru, Chile,
Argentina (dumpsites with biogas recovery)
Key differentiators

Water concessions (AssetCo/OpCo)

Waste: landfill sites, biogas recovery

Differentiating factors:

proven and recognized local experience

brand name and group size vs. unreliable local
competitors;

powerful local partners (ex: ICA in Mexico)
+3‐5% CAGR
750
650
202
Focus Guayaquil, Ecuador contract: A comprehensive program
providing access to water
The challenge
CONTRACT SCOPE
Site: City of Guayaquil
Scope: Operation and maintenance of the drinking water
and wastewater services
Duration: 30 years
Contract Type: Concession
Annual Revenue: €145m
EXPERTISE
- 5,000 km of water network
- 4 625 km of sewer network
- 481 067 water meters
- 3 drinking water treatment plants
o
The Guayaquil Government aimed to improve the services and
operating performance of the existing water utilities, especially to
underprivileged urban areas that have little access to potable
water in safe conditions
Veolia’s solution
In line with the Government’s priorities to increase operational
efficiency in the areas of poor water supply and reduce the
complaints about water quality, Veolia was awarded a 30-year
concession in 2001 to provide drinking water and sewerage
services to Guayaquil
o
o
o
60% increase
in access to
safe drinking
water in the
last 10 years
o
2,5 M
Inhabitants
served
Emergency Aid, Social Tariffs and Mediation
More than
1,000,000 m3/d of
water produced
Veolia teams work with a network of 700 community leaders
to provide assistance to people living in the city's poorer
districts
- 481 067 meters installed, call center operational 24/7 and
agencies placed at customers' disposal
- 789 km of water network expansion and around 1500 km of
waste water expansion in 5 years
- Today, 97 % of the population is connected to the
water services and 86 % to the wastewater services
- Between 2003 and 2013: 60 % increase in access to safe
water
203
Fibria, Brazil, management of waste from the paper pulp industry,
an example of circular economy
The challenge
CONTRACT SCOPE
Site: Três Lagoas, Mato Grosso do Soul,
Brazil
Scope: Mineral waste conversion and
recovery process
Start Date: 2011
Duration: 5 years and 7 years (2 plants)
Revenue: €5m
29,000 tons of
waste were
recovered
Savings on the
purchase of soil
correctives
The Brazilian cellulose industry is one of the strongest in the
world, largely due to its soil quality and the easy adaptability of
eucalyptus species
Furthermore, with tightened discharge standards and strong
incentives to reduce harvesting of the basic resource, Brazilian
legislation is forcing the paper industry to take an interest in waste
material recovery solutions, the waste-to-energy recovery of its
effluents, etc.
Veolia’s solution
Veolia and Fibria have become global benchmarks in the
management of waste from the paper pulp (cellulose) industry.
Veolia is responsible for converting 100% of the mineral waste
generated during Fibria’s cellulose production process, at both its
Jacarei-SP and Tres Lagoas-MS plants, into soil acidity
correctives
Veolia put in place a process to convert the waste from the
cellulose production process into soil acidity corrective which will
be used in Fibria’s own eucalyptus cultivation. It`s a complete
cycle: waste is incorporated into the production chain and
converted into agricultural inputs at the end of the process
- Eliminating transport to landfill has done away with the need to
build a new storage facility
- Fibria also reduced its environmental impact, as it no longer
needs to incinerate its waste
- The client has replaced the limestone used to treat the soil on
it’s plantations with a corrective manufactured by Veolia, leading
204
to a significant drop in purchasing costs
204
-
-
-
RIMSA (Mexico): dismantling and removal of structures and soil
contaminated
The challenge
CONTRACT SCOPE
ACTIVITY SECTOR: Chemical
Remediation of one of the oldest (35 years), most important and
dangerous environmental liabilities in the country, located in a
densely populated area of the state of Mexico, which caused
great social tensions and grievances at all levels of government.
This project required the elimination of emissions contaminated
with hexavalent chromium into the atmosphere during demolition
and dismantling, as well as control of the transportation of the
hazardous waste on a route of about 1,000 km
Priority segment:
Services assessment and site remediation
Veolia’s solution
Site: Tultitlán, Mexico State
Scope: Controlled demolition of contaminated facilities
Duration: 5 months
34,900 tons of materials, structures and land contaminated with
hexavalent chromium were demolished and removed in two
stages
Demolition and
removal of 34,900
tons of Chromium
VI waste
Work in 3
encapsulated
industrial
buildings
695 full-trailers
used for removal
of materials
Eliminate one of the main environmental liabilities in Mexico,
which for decades caused serious illness and death to the people
of the surrounding areas. This also produced claims and social
unrest, plus contamination of the subsoil and groundwater
The site can now be used as a public park for the community that
suffered for years from the effects of hexavalent chromium
205
Veolia in Africa and Middle East
countries
AME Zone: Business overview
Veolia’s presence
TBU
Key figures
Lebanon
Morocco
Bahrain
Qatar
Egypt
Niger
2015 estimated revenue: €1.2bn
UAE
Saudi
Arabia
Oman
Water
329
Gabon
Energy
833
Water Activity



Over 400 contracts
9,727 employees
40 subsidiaries
Energy Activity
207
History of Veolia’s presence
1997: 20 year Concession contract for production & distribution of electricity and water in Gabon 2001: 10 year Lease contract for production & distribution of potable water in Niger
20 year O&M contract for the water reclamation plant operation of Windhoek in Namibia
2002: 25‐year and 30‐year Concession contracts for electricity, water and waste water distribution services in Tangiers and Rabat, Morocco
JV between Dalkia and Majid Al Futtaim, to create ENOVA (Building Energy Efficiency)
2007: Sur desalination plant BOO 2+20‐year operations contract in Oman (introduction to the Muscat stock exchange of Sharqiyah Desalination Company in June 2013)
2008: 6 year Performance contract for potable and wastewater services of Riyadh, KSA
2009: 25‐year Concession contract for collection and treatment of wastewater in Ajman, UAE
2010: 3+12‐year DB and O&M contracts for a reverse osmosis desalination plant in Fujairah, UAE
2011: Second 10 year lease contract for potable water services in Niger
2012: BOOT including 25‐year operations of two wastewater treatment plants in UAE (Al Watba
in Abu Dhabi and Alahamah in Al Ain)
2014: 2‐year O&M contract for water treatment facility for AngloGold Ashanti (Ghana) Extension of BOO Sur contract in Oman. O&M extended up to 2036
2015: 4 year management contract for electricity services with Electricité de Guinée
Creation of Veolia Africa and Veolia Middle East holdings as a result of geographical org.
208
Africa key market trends
Market dynamics and growth ambition
Industrial Market:
Drivers: availability of natural resources and their exploitation by international (and national) companies is a
historical trend. This situation creates opportunities for environmental services (water, energy optimization,
waste treatment and recycling) since the governments are enforcing international environmental regulations
2 market segments selected: Mining and Oil & Gas upstream.
Range of offers: optimizing the water cycle, recycling of ore, waste management
Targeted positioning: preferred partner for environmental services
Cities market:
Drivers: economic development of Africa is conditioned by the wide access to essential services, mainly
electricity and potable water and sewerage services
Range of offers:
Water & Energy: duplicate the “Niger model”, i.e. state owned Asset Company which contracts with a private
operator through a performance or a lease contract
Waste: booming demand for landfills in the context of international tenders supported by institutional lenders
(World Bank…)
Target: develop standard and high quality landfills, including methane capture and energy production and
recovered fuel
209
Middle East key market trends
Market dynamics and growth ambition
Industrial Market
Drivers: the national wealth of many countries in the Middle East derives from Oil & Gas. This situation creates
opportunities for environmental services (water, waste treatment and recycling) since the governments are enforcing
international environmental regulations
2 market segments selected: Oil & Gas upstream and downstream, Mining (Aluminum in Middle East, Mining &
Metals in KSA)
Range of offers: water treatment, hazardous waste management (especially NORMS), industrial services (tank
cleaning, oily sludge recovery)
Targeted positioning: preferred partner of the local and international oil & gas companies for environmental services
Cities market
Support the rapid growth of cities and infrastructures in the Middle East
Offers: Smart cities, Building Energy Services, Cooling services
Traditional O&M contracts for water and wastewater plants
Waste treatment and recycling
210
Strategy
Africa
Middle East
Contribute to sustainable
economical development
and to social progress of
African countries
Finance projects based on
permanent infrastructures,
enabling safe access to
essential services (water,
wastewater collection and
treatment, energy, solid waste
treatment)
Allow industrial development
(extractive industry and others)
in Africa while meeting
international environmental
standards
Projects in Middle East
need heavy investments.
We want to support
infrastructure needs and
offer high level operations
management in water,
waste and energy areas
Smart models: Building
energy services, waste to
energy, recycling, smart
networks
Become a privileged
environmental service
provider for the Oil&Gas
industries
211
SEEG contract: Electricity and Water production and distribution
Client challenges
The benefit for our client
Gabon is a country with a high population growth and an explosion of urbanization. The major challenge is to meet the growing demand for electricity and drinking water and invest in innovative solutions to improve customer service
SEEG has invested 610 million euros between 1997 and 2013, more than 82% of which in the delegated perimeter. SEEG also proactively led, during the concession’s first 3 years, the rehabilitation and upgrading of the existing facilities
Extension of networks and capacities led to a significant increase in the number of subscribers +188% for electricity and +212% for drinking water
Major work was also undertaken in order to increase and modernize SEEG production capacity, including the enhancement of the Owendo power plant capacity by substituting natural gas for heavy fuel oil
Veolia’s solution
In June 1997, Veolia was awarded the public service concession for water and electricity in Gabon, signed a 20 year contract with the Gabonese Republic and became the majority shareholder of SEEG. The past 18 years have been marked by the resumption of investment, for a better service both in terms of quantity and of quality. This ability to invest has been the engine of growth in the number of subscribers, from 100,000 to 271,400 for electricity and from 59,000 to more than 159,000 for water between 1997 and 2014
The tasks of SEEG under the concession agreement cover production, transport and distribution of drinking water and electricity on the conceded perimeter (main cities of Gabon)
Customers
Establishment of an accessible call center 7/7 and 24/24 and development of a local network available 7/7 for the purchase refills of prepaid electricity meters
271,000 clients for electricity
159,000 clients for drinking water
16,000 social connections
212
ENOVA in the Middle East
€106m
revenue 2015
3,225
213
Veolia in Australia & New Zealand
Our History
1969
50/50 joint venture formed Collex Pty Ltd
1994
Veolia commenced water operations in Australia through the Wyuna contract
1997
Commenced water operations in New Zealand with the Papakura contract
2006
All operating entities move towards new brand identity of Veolia
2009
Entered the Australian Energy Services market through Dalkia
2014
Veolia ANZ becomes a single integrated environmental solutions organisation
215
Our Geography & Key Locations
Darwin
Jabiru
Cairns
Port Hedland
Karratha
Newman
27.6m combined population
Townsville
1 per km2
Mackay
Rockhampton
0.2 per km2
2.5 per km2
Sunshine Coast
1.7 per km2
Geraldton
Perth
Olympic Dam
Kalgoorlie
8m km2 combined land mass
€1bn 2015 est. revenue
Brisbane
Kenya
Gold Coast
Moomba
Whyalla
Adelaide
103 per km2
9.3 per km2
Goulburn
Canberra
Newcastle
Sydney
Wollongong
Auckland
Morwell
Melbourne
Ohakune
24 per km2
Wanganui
Launceston
Wellington
Hobart
5.7 per km2
Taumarunui
Wanaka
Queenstown
Invercargill
16.4 per km2
57 per km2
216
Our Economy
ECONOMY SLOWING though remains in positive territory
LARGE INDUSTRIALS UNDER PRESSURE reducing Veolia margins
A$ WEAKENED and expected to remain at current levels
GDP GROWTH AT 2% and forecast to improve slightly
217
Our Activities
2015 est. revenue €1bn
Energy
Split by customer type
Municipal
A$213m (15%)
A$97m (7%)
Water
A$203m (16%)
Waste collection &
disposal
A$750m (54%)
Industrial services
A$371m (23%)
Figures based on 2014 performance
Industrial
A$1,208m (85%)
218
Our People
4,200 employees
200+ locations - many remote and customer site-based
MATRIX STRUCTURE of State & National leadership
INDIGINEOUS ENGAGEMENT a key (customer-driven) priority
219
Our Facilities
8 waste processing/recycling facilities
50 water treatment plants under management
A$150m+ INVESTMENT in new facilities 2014-2017
AWARD WINNING Woodlawn EcoPrecinct
220
Our NEWEST Facilities – Brooklyn Thermal
THERMAL DESORPTION TREATMENT of contaminated sludge & soils
Capacity to process up to 20,000t PER YEAR
Maximising RECOVERY OF INDUSTRIAL WASTE into reusable products
COMMISSIONED JULY 2015
221
Our NEWEST Facilities – Woodlawn Mechanical and Biological Treatment
facility
Converting waste into COMPOST & ALTERNATIVE FUEL
Achieving resource recovery targets for 13 SYDNEY COUNCILS
CLOSING THE LOOP through mine rehabilitation
Construction underway - COMMISSIONING JULY 2017
222
Our Customers
Extensive contracts with Australia’s LARGEST COMPANIES
TOP 10 CUSTOMERS 50:50 mix Water vs Waste Services
50,000+ CUSTOMERS across most industry segments
Large customers SEEKING TO CONSOLIDATE Water, Waste & Energy
Services
223
Our Contracts – Hunter Water
26 water and wastewater plants
OUTSTANDING RESULTS in Safety and Compliance
Asset management BEST PRACTICE
SHOWCASE for future outsourcing opportunities in Australia
224
Our Contracts – Australian Department of Defense
360 sites, many remote
9,000 bins/receptacles
5+5 year contract commencing October 2014
Platform for REGIONAL EXPANSION
225
Our Contracts – Queensland Gas Corporation
A$750m+ 20 YEAR CONTRACT commenced in April 2013
O&M FOR THREE CSG WATER TREATMENT PLANTS
Kenya (Central & Relocatable WTP)
Windibri WTP
Northern WTP (Woleebee Creek)
CAPACITY TO TREAT 200,000mᶟ of CSG production water per day
226
Our Contracts – Queensland Gas Corporation
Strategic acquisitions & regional expansion
Opportunity for end to end waste offering
Elevate Veolia to #1 position in key markets
Precinct/Residential water recycling schemes
Networks & Wastewater Treatment Plants O&M
Synergies with existing assets & client opportunities
Develop organics processing capability
Strong customer demand across existing clients
Opportunity for synergies with waste water plants
Improve customer experience with integrated IT
Market differentiator with large clients
Increases customer ‘stickyness’, reduces digital threat 227
227
Our Strategy
Develop solutions based on mitigating our CUSTOMERS ENVIRONMENTAL
CHALLENGES
LEVERAGE SERVICE & PERFORMANCE MANAGEMENT to move up the
value chain
Combine existing service offerings to EXECUTE THE CIRCULAR ECONOMY
SIMPLIFY & STANDARDIZE our business processes to increase profitability
228
Global Businesses
Global business: Business overview
Veolia’s presence
TBU
2015 Est. revenue €5.1bn
8%
 Global footprint for VWT & SADE
 European for SARP, SARPI, SEDE
& VIGS
19%
48%
 ¾ Construction (SADE – VWT)
 ¼ Operations (SARP-SARPI, SEDE,
VIGS)
25%
 65% Industrial
 35% Municipal
VWT
SADE
Hazardous waste
Vigs & other
 30,000 employees
 20% of Veolia revenue
230
Strategy by activity and key differentiating factors

Commercial Agility

Excellence in delivery

Digitalization

Standardization

Construction business
 Secure backlog => Commercial agility
 Differentiate through in-house technology

Operations
 Digitalization
 Market share (leader)
 Competitive offers to industrial clients

Both
 Strengthen Veolia reputation
=> Excellence in delivery
 Reduce costs: standardization & series
231
Commercial agility
 World is moving fast, necessary to adapt permanently to secure
bookings
 Mining, unconventional Oil: very slow
 Oil & Gas downstream: continue to invest
 Pharma: still big
 Public money is scarce, private money is abundant (Asset
/OpCo)
232
Excellence in delivery
Deliver the
same service in
all branches
with common
procedures and
same trucks
Deliver the
same service
to all
customers,
whatever the
treatment site
Ensure full
traceability of
services
Ensure
customer
management
and execution
is
homogeneous
in all
geographies
Ensure delivery
of projects is
on time, on
specs, on
budget
Start at the
design phase,
continue on
project
execution
233
Digitalization is magic
Achieve commercial differentiation and
productivity improvement
Critical for new services offering
Continuous
monitoring of
projects sold
as DB only
Ensure customer Ensure full
management and traceability of
services
execution is
homogeneous in
all geographies
234
Standardization, a good driver
for growth and excellence in operations
Helps reduce our production
costs
Improves our quality of service
and consistency
235235
SADE Today
 Markets: Networks of all types (water, electricity, heating, telecom)
 Footprint: Global
 2015 est. revenue: €1.3bn
 Employees: 10,800
 Flagships: Pipe rehabilitation, windmill connection, telecom network
maintenance & development
236
Veolia Water Technologies today
 Markets: Water treatment
 Footprint: Global
 2015 Estimated Revenue: €2.4bn
 Flagships: Thermal Desalination; Evapo- crystalizer (HPD); Actiflo;
Biostyr; Elga
237
HAZARDOUS WASTE
 Markets: Hazardous waste collection and treatment; soil
remediation; pipe cleaning and rehabilitation; industrial
maintenance; composting from water & waste treatment plants
sludge; fertilizer; methanization
 Footprint: Europe
 2015 Estimated Revenue: €970m
238
Veolia Industrial Global Solutions today
 Markets: Industrial Utilities for Global accounts
 Footprint: Europe
 2015 estimated Revenue: €370m
 Flagships: Novartis; Sense for Peugeot; Renault Tanger
239
2016- 2018 Roadmap
TBU
Roadmap
•
•
•
•
VWT: Integration through regional
process
 Cost control
 Portfolio review
 Technology acquisitions
Develop Industrial Solutions
Secure Municipal & Desalination
projects
HAZARDOUS WASTE:
 Continued development of our
treatment capacities with
additional platforms in Europe
 Enhance profitability of used oil
treatment
 Develop nuclear treatment
Revenue growth
+2% CAGR, mostly driven by hazardous
waste
€5.4bn
€5.1bn
2015
VWT
SADE
2018
HAZARDOUS WASTE*
VIGS & OTHER
* SARP, SARPI, SEDE
240
Overview of key contracts
VWT
- Az Zour North
(Desalination Kuwait)
- Kafubu Zambia
- Antero US
- BIO SAV France
- Hong Kong Sludge
- Sadara Desalination
SADE
-
Ivory Coast
Jordan: Disi
Antero US
Burkina Faso
Peru: Pachatutec –
Cuzco
SARPI
-
Constanti
Limay
Sedibex
Sotrenor
(Saudi Arabia)
-
Fibria Brasil
VIGS
-
Novartis - Bale
Peugeot Sochaux &
Mulhouse
Artelia
DCNS
SEDE
-
SIAAP
Artois Méthanisation
SARP
-
Fos-sur-Mer
241
241
Az Zour North thermal desalination plant in Kuwait
Consortium contract ‐ country’s first public‐private partnership for an independent water and power project (IWPP).
40 years
1.8 Billion US dollars
of which
Veolia Sidem contracts 320 million euros
486,422 m3/day
20% of Kuwait’s desalination capacity
Start January 2014 ‐ End November 2016
1500 MW
10% of Kuwait’s electricity generation
242
Construction of Az Zour North thermal desalination
plant in Kuwait
Construction by Sidem:
One of the world’s few companies
with command of thermal
desalination technologies
o
Technology:
Multi effect distillation adapts
to fluctuations in water demand over
time
o
10 MED-TVC desalination units*
of 48,640 m3/day (10.7 MIGD)
for a total capacity of
486,400 m3/day (107 MIGD)
*each unit: 55 meters long, 30 meters wide, 15 meters
high and 2700 tons
243
Investor Relations contact information
Ronald Wasylec
Senior Vice President, Investor Relations
Telephone : +33 1 71 75 12 23
e-mail: [email protected]
Ariane de Lamaze
Vice President, Investor Relations
Telephone : +33 1 71 75 06 00
e-mail: [email protected]
38, avenue Kléber - 75116 Paris – France
Fax : +33 1 71 75 10 12
Terri Anne Powers
Director of North American Investor Relations
200 East Randolph Street, Suite 7900 - Chicago, IL 60601
Tel : +1 (312) 552 2890
Fax : +1 (312) 552 2866
e-mail : [email protected]
http://www.finance.veolia.com
244

Investor Day - Veolia Finance

Transcription

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